Car Payment not being made in Chap 13

[meetsv]

I have been in the chapter 13 for about 3 months now, the trustee has not made a payment to one of my cars in the payment plan, the lender is charging interest, is this normal?

[andy158]

Yes it is normal. The trustee made our first car payment nearly 5 months into our bk. The lender can only charge what the plan allows. Ours was 5%. They cannot charge interest outside of the plan provisions or "tack on" additional interest while waiting payment from the trustee.

[meetsv]

andy158,

Thanks but now I will be switching to Chap 7 and since the trustee did not made a payment to the car, I will have to let the car go because I do not have the cash to pay the 4 month require to bring the loan up to date. Although, we supposed to get some money back from what the trustee have, we don't know if the Chapt 7 trustee will allow that money to be reimburse to us.

[despritfreya]

1. It appears your Plan was not confirmed. If that is the case, the funds you paid to the Chapter 13 will not be turned over to the Chapter 7 Trustee since those funds represent post petition earnings. Post petition earnings are not property of the Chapter 7 estate. The actual amount you get back will depend upon local practice which may or may not allow your 13 trustee to take a small fee. It also depends upon whether or not you had an attny and if that attny is owed any $$.

2. Do not just assume you will lose the vehicle. This depends upon the lender. Some will require you to bring payments current before reaffirming. Others will tack the missing payments onto the end of the loan and allow you to reaffirm as though you were current. Still others will allow you to slowly catch up while making the regular payment. If you want to keep the vehicle and reaffirming is in the cards, contact your lender before converting to determine what its policy is. Alternatively you can "redeem" the car thus paying off the current lender and owing the $$ to a new lender (at a high interest rate). There are companies out there that advertise financing a redemption.

Des.

[meetsv]

Des,

Thank you, GMAC Financial wants us to come up with the four months that we are behind due to no payments not being made while we were on the chap 13, basically we are going to loose the car unless we are able to come up with something else.

[LadyInTheRed]

meetsv, refer to Des' item 1. You may be getting a good portion of the funds you paid to the trustee back. Don't give up. Keep communicating with GMAC and let them know you want to catch up on payments. If the car is worth at least what you owe and you can afford to make payments, consider reaffirming. The reaffirmation agreement could include terms that allow you to catch up over time.