should we stop paying hte car pymt?

[95kindebt]

we are planning on cramming down our 2002 chev. tahoe in the ch 13, when we file in november. Should we continue to pay on it now, or just run late with it and stash the cash? Do payments have to be current to be crammed down?

[optimistic1]

If you can continue to pay it, I would. Why? Because a lender has great power over the car, if you pay late just 1 month, they can repossess it. And while you might be able to get it back after filing a Chapter 13, there is no guarantee.

I have read stories though about lenders taking forever to repossess a vehicle, so there is no real way to know I guess.

Your payments do not need to be current to utilize the cram down.

[texasgal]

I agree, you never know how long a creditor will wait before repo, but did you say you are not filing until November? I am pretty sure they will want the vehicle or some payment before filing in four months. The attorneys that we consulted with advised staying within 30 days on all vehicles, unless you have no interest in keeping them.

[optimistic1]

Now, besides the 30 day rule, the question is does the bank really want a 2002 Chevy Tahoe in this economy? All of the high gas mileage trucks/suv's are heavily discounted on the lots, and a bank will probably just auction it, they would probably break even after all the trouble.

You might have some time, but the previous poster is correct, if you arent filing til November, I would keep paying it.

[95kindebt]

Thanks guys!! I just wasn't sure about that!!! We are looking into getting another inexpensive sedan or something to replace my husbands 2 beater cars. It will get better gas mileage than my tahoe too.

[klandsb]

Can you explain what "cramming means " ??? new to all this and trying to get educated

[rrockinggramma]

cramming down a car in a chapter 13 means that you take the vehicle down to the fair market value of the vehicle currently and the remaining amount is considered unsecured and is paid back at the same percentage as your other unsecured creditors. Example:

Car loan over 910 days old is for 16000.00
Fair Market Value of car now is only 10,000.00

so you put the car in the plan, the 10,000 is considered secured and that is what the creditor gets and the remaining 6,000 is paid at the percentage to unsecured as stated in your plan. Mine started at 10 percent, so the creditor in this example would have received an additional 600.00 making the total the creditor received for this car loan 10,600 (plus trustee fees and the interest paid to the company set by the trustee)

Now the car loan has to be older than 910 days to cram down but even if it isn't, if you include a vehicle in your plan, the loan company can only file a claim for the principal amount owed, no interest or fees. The trustee will pay a set interest rate (mine was 6 percent) to the company plus the trustee fee. So you would still pay off your car for less because you won't be shelling out all the interest on the loan too. (this works great for high interest loans. Not so great for zero percent financing. LOL)

[Yoshi]

Thanks guys!! I just wasn't sure about that!!! We are looking into getting another inexpensive sedan or something to replace my husbands 2 beater cars. It will get better gas mileage than my tahoe too.

My atty recommend the same as far as repo chances.. However he also stated that if we had to miss payment to say pay for his retainer to call the bank and tell them we are struggling and that we will be making a payment. His point was if we blow off the bank they may be more anxious to get the car. But if we call them and tell them we're just behind a little and will send something soon they won't be as quick to come get the car becasue they believe we will be paying. Or even skip a payment then make one then skip another one. I agree paying down a car that is upside down is sort of a waste of your money. Since it will be crammed down and the upside down parts goes to unsecured.