Vehicle Surrender

[IvoryAngel]

Consulting with an attorney to file next week as I do not see any other way out of a horrid car note, my question is it is our only vehicle. I'm not sure at what point during bankruptcy you have to surrender your vehicle and is it a negative to rent a car so you have a vehicle until you can buy another as we do have some things that require us to have a car?

[justbroke]

If you want out, you maybe able to "replace" the car under the 722 Redemption program. US Bank has a program for Chapter 7 debtors to either "redeem" their existing vehicle or get a new one while in a Chapter 7. The interest rate can be in the high teens (think 16-19%), but can be an option. As your attorney about it.

[bcohen]

Or, you could simply file within the 30-day late period (i.e. within 30 days of the first missed payment being due) so that the lender will not repossess before you file. Once you have filed for bankruptcy protection and obtained your case number, the automatic stay prevents the lender from repossessing until after discharge (unless they file for relief from the stay, which usually does not happen).

In other words, you could quit paying the car loan, file within a couple weeks of the payment due date, and continue to drive the car payment-free for a good 3 to 4 months, maybe even longer. If you simply set aside the money which you are not paying to your lender, by the time they take back the car, you should have $1500 or more saved up. You could then use those funds as a down payment toward another financed vehicle, or buy an older model with the money, and not have to worry about a loan again.

[LadyInTheRed]

If the car is being surrendered, the lender does not have to get relief from stay to repossess. You have 30 or 45 days (depending on how you interpret conflicting laws) to follow through on your intent. If you don't, the creditor is free to repo.

[bcohen]

Ok, fair enough. So you simply put on your statement of intent that you are going to redeem, and then the creditor will have to file for relief from the stay or wait for the discharge. You are not legally required to do whatever you put as your intention, i.e. you could say you are going to reaffirm or redeem, but then not follow through.

[LadyInTheRed]

It is true you are not required to follow your original intent. But, if you are in default and you don't perform your stated intent, whether it be reafirmation or redemption, within 30 or 45 days of the 341, you risk repo without the creditor being required to file a motion for relief because the stay his automatically lifted.

There is a cite to the relevant Bankruptcy Code Section in the following topic:
http://www.bkforum.com/forum/before-...ic-stay-lifted

[IvoryAngel]

Thanks! We spoke with the attorney and still working out the details I think we may have to make one more payment before we file bummer!!