Purchasing an Auto while in Chapter 13

[nicki52731]

I am currently in a Chapter 13 and my auto is on it's last legs. Apparently, the trustee has something worked out with a few local auto dealers and banks in the area. I want to give back the current auto I have and purchase a good used one. The problem is I owe $19,000 on the auto I want to give back. My attorney states the difference between what the finance company gets for it and the amount owed goes to unsecured debt in my bankruptcy. The trustees office states I still would have to make some hefty payments on the difference and that it stays in secured debt. Who is right? I live in Michigan, if that makes a difference. I do have some concerns regarding some of the information that I have gotten from my attorneys office in the past. Any advice or clarification would be appreciated.

[Nicollette]

I was in a ch 13, surrendered a car that was in the plan, and had the BK judge's approval to finance a newer car. I would have to look back over all my BK stuff, but I'm thinking that the difference of what the surrendered car sold for, became an unsecured debt?

[TheBajan]

My attorney told me that we wouldn't be responsible for collateralized debt if we surrendered it in the plan. So if you surrender the vehicle, why would you still be responsible for it? I am sure someone here with more knowledge than me can better answer your question. I think your attorney is right on this.

[nicki52731]

Thanks for your answer.