Car in plan died, advice/experiences on getting a new one?

[cspa522]

Before the BK our attorney advised us to buy a new car to replace my aging one. Did so. Husband's car died last Thursday, and it's the engine. Will take $7000 to fix or so. We had some cash saved up for emergencies, and bought a used car that actually came with a 3 year powertrain warranty, so it was a great deal and we paid cash.

As we were paying cash I didn't even consider going to the attorney about it, but now we have a question:

We would like to sell my husband's dead car, and actually have offers on it via craigslist, but there's a lien on it due to being in the plan. We both stupidly thought the car wasn't included in the plan! I suppose at the time of filing we were so worried about getting me a car that would last we didn't even think about the last few thousand we had to pay on his car, and that it would be in the plan. Dumb, I know, but there it is.

So today I confirmed, yes, the dead car is being paid in the plan.

What is the likelihood of the trustee approving us to sell the car and put the money towards the cost of the new vehicle? Or will they take the money all together and put it towards our plan?

Or am I going to be in serious trouble for buying a car without consulting my attorney or my trustee? As it wasn't taking on debt I didn't think I needed to.

Thanks in advance to anyone who answers!

[keepsmiling]

No advice other than ask your attorney. Congrats on getting that new car with a warranty! What did you find? We just totaled our car and amazingly enough walked away virtually unscathed.. miraculous really. Need to find something but really dreading car shopping with very little money.... again.

Hope it works out but I'm not optimistic that you will see any cash out of the deal since you've already paid the money for the new car. My guess is ... you surrender the car and the extra money goes to unsecured. OR the tt wants the cash you get for selling it.

But holding out some hope for you! Keep us posted, should be interesting.

[cspa522]

We submitted to our attorney the quote for the repair, so now I have to stay on her to get it filed quickly. I asked her if there's any chance we can retain the money from the sale to put toward the new car purchase/help recoup our savings account since it basically took it down to $200! We shall see.

I ended up getting a really nice SUV for over $1000 cheaper than any of the cars we were looking at! Because I don't have far to go to work it's not a gas hog for me. And our insurance dropped too, so it's been okay all around. Our budget for the car was under $10,000 and we didn't pay near that. It really was a once in a lifetime kind of opportunity.

If we can't keep the money, and it goes toward the plan, does that then lower our pay-off amount? I've never really understood how that works.

Thanks!

[cspa522]

I'm getting really irritated. I've emailed our attorney at least five times, and left two messages on her voice mail. I am getting zero response. She's not close so I can't just pop over there in the middle of the day at the moment. I need her to file the petition for us to be able to sell the broken down car and get it out of my garage. Any advice for an unresponsive attorney?

[cspa522]

Update on car situation.

Update: So it's been well over a month, almost a month and a half since this whole thing started. We submitted to our trustee a request to sell our dead car and pay the entire sale amount to the creditor. Then we got a letter from the trustee saying what we intend to do with the money isn't clear. Attorney is supposed to be taking care of that. Between then and now, about a week's time, the creditor denied our request to sell the car, stating that they want to be paid in full the balance remaining on the car (which would be more than what we can get for the car if we sell it).

I have emailed my attorney, again, to get more information on what we do now that the creditor has said "We don't want to allow them to sell the car," and if the trustee agrees.

I don't really understand why the attorney can't just say "They'll continue to pay back the full amount owed as set up in the plan, they just want to get rid of this car." Is that so hard to convey?

So because what the atty originally submitted isn't clear enough for the trustee, and the creditor has denied our request to sell the car, we're back to square one. Owning a car that doesn't run, that we can't get rid of, and more frustrated than ever. We've never told anyone that we filed for BK, not our family, no one, so we're really, really struggling with how to get rid of this car, or where we can store it, until we have permission to sell it off.

ARGH! So frustrated!!

[keepsmiling]

Oh crap.
How about amend the plan to surrender the car?
That's what the creditor deserves.
of course they may never get around to actually taking it.

[cspa522]

If I could get my attorney to actually RESPOND to me it wouldn't be so frustrating. I've left voice mails and emails. Nothing. COME ON! It was our decision not to tell anyone about our filing for BK. We were too embarrassed and wanted to resolve it on our own. We knew our families would be disappointed that we'd gotten ourselves into this situation, and frankly, we didn't want to deal with that. They wouldn't have been mean about it or anything, but we wanted to fix it ourselves. And until now it's gone on swimmingly. Just so freaking irritating that this continues to be a problem. I don't understand why she wasn't more clear in her first petition, either.

[159515951]

If you sell the car and offer to transfer the lien to the new car, that would be a reasonable solution that isn't unusual.

I understand why the creditor would object...you're essentially converting them to an unsecured creditor, which isn't part of the plan.

[cspa522]

Oh crap.
How about amend the plan to surrender the car?
That's what the creditor deserves.
of course they may never get around to actually taking it.

So, what happens if the creditor never comes to take the car? We just filed our petition to amend the plan and surrender the car. I've read horror stories online about creditors just abandoning the vehicles and never removing them from the property. Fixed, ours is worth about $13,000. We owe them $3000 left in the plan. We were quoted that it would cost $7000 to fix. Not worth it to us for a car we've already fixed the a/c on 3 times in 7 years.

[andy158]

How far are you into your plan and what are the chances of selling the car for parts only without the title? Of course making it perfectly clear to the buyer that it cannot be licensed or registered. I see vehicles for sale all the time for parts. I am sure you can get an affidavit drawn up to that effect. You would pay the balance owed through your plan, so the bank would still get their money although there would be no collateral for the bank and they would hold a title to a ghost vehicle. If the engine is bad, it is of little value to the bank anyway. I would question the legality of this and would not advise you do anything illegal.

Sounds like the car isn't worth fixing if the engine is shot. $7,000 to replace an engine would buy you a decent used car! You could try to voluntarily surrender it, but that is going to warrant a modification to your plan costing you $$$.

[cspa522]

We have a petition in to surrender the car, but we figure the bank doesn't want it either, so even if that does get approved at the court date set for 9/26 we're screwed because they'll probably never come to get it. We owe less than $3000 on it at this point, and with surrendering it we'd still pay it off, but who knows what will happen.

Right now we're looking into cheaply garaging it somewhere, some self storage lot if we can find a decent on nearby, just to get it off our property. We do realize we might be paying for that service for 2 years until the BK is over, but we're not really sure what other choices we have if things don't go our way.

[rdve]

Depending on what you hear from the attorney, if you want to surrender it, look and see if the bank has a physical location near you and if so, pay to have it towed there and dropped on their property. Why pay for storage? Another thing to consider is posting a craigslist ad and see if someone will get it running for much less than you were quoted. Sounds like you have $6000 on the table at the moment...what will the car be worth in 2 years?