Need help with vehicle question-repossession

[BKINVA]

First I want to say thank you to everyone who has unknowingly helped me through my preparation for Ch13! I have a new situation and I'm not clear on how this works.

I am upside down by approx 6k on my vehicle. $425.00 per month, 3 yrs left. I can't afford this car payment. I am purchasing a used vehicle from a friend at work - cash $5,000. I will then have reliable transportation and no car payments for the 5 years that I will be in the plan. Car payments are current. Due 2/1 and I'm not going to make any more payments. Do I? 1) at the end of the month of Feb when I take possession of the new vehicle, do I contact Carmax and ask them how to surrender the vehicle? or...2) Do I want until I'm sitting with my Attorney at the end of March and have the vehicle surrendered during that time?

I am basically not paying CC bills, we are not making our mortgage payments because Wells Fargo won't work with us until we are 90 days past due - go figure!! So,most of my income is going straight to purchasing this car.

Thanks for your input!

[liz417]

First I want to say thank you to everyone who has unknowingly helped me through my preparation for Ch13! I have a new situation and I'm not clear on how this works.

I am upside down by approx 6k on my vehicle. $425.00 per month, 3 yrs left. I can't afford this car payment. I am purchasing a used vehicle from a friend at work - cash $5,000. I will then have reliable transportation and no car payments for the 5 years that I will be in the plan. Car payments are current. Due 2/1 and I'm not going to make any more payments. Do I? 1) at the end of the month of Feb when I take possession of the new vehicle, do I contact Carmax and ask them how to surrender the vehicle? or...2) Do I want until I'm sitting with my Attorney at the end of March and have the vehicle surrendered during that time?

I am basically not paying CC bills, we are not making our mortgage payments because Wells Fargo won't work with us until we are 90 days past due - go figure!! So,most of my income is going straight to purchasing this car.

Thanks for your input!

Hi,
If the car loan is over 910 days, you should be able to "cram" the loan down. Bring the loan down to what the car is worth. Would you want to do that? Is the car reliable? Having a car payment in a ch 13 is a good thing...less $$ to your monthly repayment program. If you decide that you want to pay the $5k for the used car, make sure you will be able to exempt it.
Okay, now to answer you question: I would call Carmax and have them pick up the car, then when you file include them. Good Luck!

[catleg]

Bad move. You want the loan on the car, not free and clear.

[MacyJ]

Be careful. A car with a $5,000 value that you own free and clear could hurt you.

Check out KBB.com and find out what the vehicle you have the loan on is worth (ours was close to an average of the retail and private party value). This is all you're going to pay in the plan. The remainder of the loan is considered unsecured debt, and you will pay that at a percentage of your other unsecured debt.

We had a van with a payment of $420 which we included as a secured credit. Our total BK plan payment is $260/month and that includes the van. Once we've paid off the plan, the van is ours free and clear.

[BKINVA]

My current vehicle constantly has high repair bills...right now it's another $1200 worth of repairs. It's not dependable, especially for 5 more years. If I can't get to work, I can't pay for my plan. I'm hoping that my out of pocket medical costs (diabetic) will help offset my DI in my favor. My grocery budget doesn't have a lot of room as I must eat a specific and healthy diet due to my diabetes. I'm currently in the waiting period as I'm trying to also bring my gross income down as the last 6 mos of '08 I had an enormous amount of overtime. I'm more worried about reliable transportation and thank goodness I have a good attorney and he will make sure I haven't missed anything on my budget. Thanks!!!!!! All of you have helped me so much. I'll be back I'm sure.