Car Question - Value and Title

[PinkTinker78]

I'm going to be filing chapter 13 next week and I was wondering what happens to car loans. I'm behind about 3 months and my loan balance is about $14,500 with a 15.9 rate but the car is only worth about $7,000. My monthly payments are $310 a month. Will my payments be lowered in the chapter 13 and will I only have to pay what the car is worth? I really wish I could just give the car up a get a new one, but that is unlikely.

Also, I refinanced with a different company about a year ago because my rate was at 23% and the new company never got the title. I currently have the title and it still lists the old company. So my question is, would the new company need to have the title in hand before they can try to repo my car. I got a message from them today checking the status of the tile because I was supposed to have it corrected and mailed to them. He even said they are more concerned with getting the new title than my payments. So I'm thinking they are bugging me for that so they can try to repo my car. So I should probably hang on to the title a little longer until I get my BK filed. Is this correct.

[StartingOver08]

I bet they are concerned with not having the title! Looks like they have a problem. I certainly would not send the title to them.

Check with your attorney that is filing your BK. I would think that the company may have a tough time once you file BK because it sounds like they do NOT have a perfected lien. This may create an issue with you in your BK. Look at this link: http://www.moranlaw.net/car-ownership.htm

[PinkTinker78]

Wow, thats good information. I was actually going to go and fix the title but I wasn't going to mail it to them until after I filed the BK..I am hoping it will delay a repo. I'm afraid If I tell them I'm filing chapter 13 they would try to come grab my car the next day. Maybe I should go to the DMV the day before I file and then I will call them and tell the the title is in the mail and by the way, I filed chapter 13 here is my case number.

[StartingOver08]

Be careful. Make sure you speak to your attorney. I am more concerned that the Trustee may step in and say since the lien is not perfected you don't owe the money! Not sure how that works in a Ch 13 - so please let your attorney know so you can handle it the right way.

[rrockinggramma]

I am surprised that your insurance company didn't request that the title be updated. If you were in an accident, the insurance company would pay the secured party listed on the title.

[PinkTinker78]

Well that's another issue, I never updated my address with my insurance from when I moved from my parents house and when I did, they dropped me because they were not licensed to lend where I moved to. I slacked off and didn't get new insurance for awhile and now everybody wants to charge me an arm and a leg. So now I have to also shop around for insurance because that is defianlty required for the chapter 13. My old insurance never asked for the title or anything. This is so stressful, I am about to just pull my hair out over this. My car place keeps calling me and today they called my mom and now I'm upset because i didn't want her to know anything about this.

[PinkTinker78]

Well I just talked to my attorney and I explained to him what happened as far as the title never getting perfected. I told him I had the title with the old company and a letter releasing the lien. I asked him if I need to get it fixed before filing and he told me don't touch it. He said that basically my credit union has an unsecured loan right now. He wants to see the letter and title before I do anything.

[StartingOver08]

Well I just talked to my attorney and I explained to him what happened as far as the title never getting perfected. I told him I had the title with the old company and a letter releasing the lien. I asked him if I need to get it fixed before filing and he told me don't touch it. He said that basically my credit union has an unsecured loan right now. He wants to see the letter and title before I do anything.

Yep. Since there is no lien the loan is not tied to the vehicle. That puts the CU between a rock and a hard place and it puts you in a small bind too. The Trustee MAY (not positive) require you to pay into the plan the entire amount of the "equity" in your car, less whatever exemptions you have for your state. How much is your car worth?

[PinkTinker78]

The car is only worth about $6000. The whole time I had it financed with Americredit my principal never went down because my interest was so high and all payments were applied to the interest.

[rrockinggramma]

I am amazed that a credit union let this slip through the cracks. LOL They have no right to reposess the vehicle. And look up the value on Kellys or Edmunds cause that is what the trustee will use to determine its value. Since you are looking at chapter 13 you would probably be paying in 6000 anyway.