Filing Chapter 13 & surrendering a vehicle

[hearr]

I'll try & explain this the best I can....I live in Texas & I met with an attorney today (initial consult) to get the specifics on filing a Chapter 13. He explained everything to me, I think. He figured up all my bills vs. income and then came up with a monthly payment I would be paying for 5 years. He then told me to go home and think about it & make a decision.
Here's my dilema though; I have (2) vehicles...One of them I had already decided to surrender & the other he listed in the plan. He said I could just go ahead and call Americredit and tell them I want to surrender it. But my question is this; if I don't include them (Americredit) in the Chapter 13, what keeps them from getting a judgement against me for the deficiency after they sell it at auction? Which means they can still seize my bank account. I asked him this, but never really got a straight answer. He just said that creditors (in Texas) rarely seize bank accounts. (That answer really didn't give me a warm & fuzzy feeling). Can anyone answer this for me? The Chapter 13 will definately help me out, but I don't want to be worried constantly that Americredit will sue me & come after my bank account..After all, the purpose of the 13 is to give me some relief from creditors & to get myself back on track.

Ken

[Nicollette]

I'll try & explain this the best I can....I live in Texas & I met with an attorney today (initial consult) to get the specifics on filing a Chapter 13. He explained everything to me, I think. He figured up all my bills vs. income and then came up with a monthly payment I would be paying for 5 years. He then told me to go home and think about it & make a decision.
Here's my dilema though; I have (2) vehicles...One of them I had already decided to surrender & the other he listed in the plan. He said I could just go ahead and call Americredit and tell them I want to surrender it. But my question is this; if I don't include them (Americredit) in the Chapter 13, what keeps them from getting a judgement against me for the deficiency after they sell it at auction? Which means they can still seize my bank account. I asked him this, but never really got a straight answer. He just said that creditors (in Texas) rarely seize bank accounts. (That answer really didn't give me a warm & fuzzy feeling). Can anyone answer this for me? The Chapter 13 will definately help me out, but I don't want to be worried constantly that Americredit will sue me & come after my bank account..After all, the purpose of the 13 is to give me some relief from creditors & to get myself back on track.

Ken

If I'm understanding your question correctly, the car you want to surrender is financed through Americredit, correct? If so, then once its sold at an auction, the defiency balance would be added in your plan as an unsecured debt.

[CarleyJo]

I am kinda in that situation...upside down cake in a pineapple vehicle. If I surrender it and they sell it at auction we are at a 0% plan....is the definancy wrote off?

[rrockinggramma]

yes it would be written off. and that is why the credit union if fighting so hard. I hope you can keep it going. GL

[hearr]

If I'm understanding your question correctly, the car you want to surrender is financed through Americredit, correct? If so, then once its sold at an auction, the defiency balance would be added in your plan as an unsecured debt.

You are correct; it's Americredit. It makes me a little nervous though that the attorney didn't mention what you said above at all. He just said go ahead & surrender it. And he also didn't figure it into my indebtedness when he calculated what my payments would be under the plan.
But having said that, let's say I do surrender it and they put it into the plan. The amount of time from the time of surrender to the time of auction/sale (which has to take place before they will know the deficiency), has to take at least 30-60 days (if not longer). Until they know what that deficiency is, how can my plan be filed and how can they know what my plan payments will be?
And my last question is this: Once I have made the decision to file the 13 & paid the attorney's fee, does a 13 work just like a 7. In other words, creditors cannot contact me? And if I get calls from creditors, I just tell them I'm filing a 13 and give them the attorney's name & contact info?

Ken

[shadowdog]

I filed for 13 last june, with the intention of surrendering my F-150. I owed a balance of $25,000. Since I was surrendering the vehicle, any deficiency would not be included in the plan, it's just a complete zero. They sold it at auction for 11,000, with a deficiency of 14,000. Since I had given up the vehicle, it was NOT included in the plan. Don't owe Ford anything.

Should be the same with your situation.

Also, what I did is I knew I was going to file for 13. I called Ford to try to get my payments pushed forward, saying I couldn't afford to make a payment. When you file 13 there is a time period in which you don't pay until repo. There is a stay that should be put in place. So, I got five months worth of free driving, only paid the insurance. When it was getting time to surrender the car (my atty informed me the stay had been lifted with the court) I called Ford myself and made arreangements with the repo company to come to my house and get vehicle. Repo company was very pleasant, just to let them know when would be a good time. They came to my house, I handed them the keys, and that was that.

Bank can argue all they want, but if you're surrendering the vehicle not much they can do about it.

Good luck

[hearr]

I filed for 13 last june, with the intention of surrendering my F-150. I owed a balance of $25,000. Since I was surrendering the vehicle, any deficiency would not be included in the plan, it's just a complete zero. They sold it at auction for 11,000, with a deficiency of 14,000. Since I had given up the vehicle, it was NOT included in the plan. Don't owe Ford anything.



Also, what I did is I knew I was going to file for 13. I called Ford to try to get my payments pushed forward, saying I couldn't afford to make a payment. When you file 13 there is a time period in which you don't pay until repo. There is a stay that should be put in place. So, I got five months worth of free driving, only paid the insurance. When it was getting time to surrender the car (my atty informed me the stay had been lifted with the court) I called Ford myself and made arreangements with the repo company to come to my house and get vehicle.

Good luck

I guess I'm really confused now..if you did not include the vehicle in your 13, I don't understand why Ford didn't expect you to pay the deficiency (or at least attempt to get a judgement)? This is what is confusing me about a 13. On another thread, someone told me that I would need to surrender the vehicle, they would sell it at auction & the deficiency would be includeed in my 13 plan. So I'm getting different answers here & that's why I'm confused.

As to my 2nd question....when I file the 13, is it just like a 7 in that creditors can no longer call/hound me? I would just refer them to my attorney?

Ken

[shadowdog]

You include the car in the plan (13), but that you're surrendering it, you don't want the vehicle, you're giving it up. No more car, no more debt. You just keep driving the vehicle until it's time to give it up. There should be a stay when you file, then the bank files a motion to have stay lifted, then they can get the car. Normal procedure, according to lawyer. Just don't make any payments, keep money for yourself. Just keep insurance on car. And when it's time to give up car, give it up, no hassles, plus it will make your confirmation plan go smoother. Shows you gave up vehicle.

[Nicollette]

I guess I'm really confused now..if you did not include the vehicle in your 13, I don't understand why Ford didn't expect you to pay the deficiency (or at least attempt to get a judgement)? This is what is confusing me about a 13. On another thread, someone told me that I would need to surrender the vehicle, they would sell it at auction & the deficiency would be includeed in my 13 plan. So I'm getting different answers here & that's why I'm confused.

As to my 2nd question....when I file the 13, is it just like a 7 in that creditors can no longer call/hound me? I would just refer them to my attorney?

Ken

Sorry if I gave you some wrong or misleading info about surrendering your vehicle. I was assuming the defiency balance would be included in the plan even though your surrendering it. I was basing this info on the fact that when my plan was filed, I kept the vehicle that I had at that time so it became a secured debt. Well, after being in my plan for two years, I decided I could no longer afford the upkeep on that car. It was nickel and diming me, so I decided to surrender it, and got permission from the BK court to incur new debt of financing a newer car. The deficiency balance became an unsecured debt in my plan. Sorry if I gave you wrong info!!

[dscurlock]

I guess I'm really confused now..if you did not include the vehicle in your 13, I don't understand why Ford didn't expect you to pay the deficiency (or at least attempt to get a judgement)? This is what is confusing me about a 13. On another thread, someone told me that I would need to surrender the vehicle, they would sell it at auction & the deficiency would be includeed in my 13 plan. So I'm getting different answers here & that's why I'm confused.

As to my 2nd question....when I file the 13, is it just like a 7 in that creditors can no longer call/hound me? I would just refer them to my attorney?

Ken

Maybe you should ask your atty, if you let the car go out side of the
plan, then what happens with the negative after auction? will the
neg balance be included in your BK plan...If he says no, then
I would be concerned, if it is not included in your BK, then
why would you be protected, if it is not included in your BK...

[Nicollette]

Maybe you should ask your atty, if you let the car go out side of the
plan, then what happens with the negative after auction? will the
neg balance be included in your BK plan...If he says no, then
I would be concerned, if it is not included in your BK, then
why would you be protected, if it is not included in your BK...

That's the same thing I'm confused about. If you voluntarily surrender it outside of the plan, and the deficiency balance is not included in the plan, then who's to say Americredit still won't come after you since they wouldn't be listed on the creditor matrix? Is this a 0% payback plan, possibly? For the OP, your attorney will have the best answers for your situation.

[unclerico]

Several times while browsing pacer I saw several 13 plans that included surrendering a vehicle or two. If it is in your plan as surrendering then there are no worries. You probably won't be paying anything back to them as it is included in the BK.

[lrprn]

Surrendering the car before filing creates an unsecured debt to list along with all your other unsecured debts when you file Ch 13.

You could also file your 13, then amend your plan later to surrender the car while your 13 is still active (although if you don't buy another car soon with about the same payment to replace it, then that opens the door to creating additional disposable income and could cause your trustee to request that the court increase your 13 payment accordingly).

The question to clarify in this situation with the remaining lawyers you'll be interviewing is regardless of whether you surrender the car before or after filing, can the lender then file an unsecured claim on what's left on the loan and your plan will then have to pay them back the same % as all the other unsecureds? I believe the answer is yes, but please ask the other lawyers you'll be interviewing to confirm that.