Ride Through on Car Loan

[jdmc1973]

My attorney advised me to just do a ride through in case I later wanted to get another car or had difficulties and couldn't keep paying. I don't have access to the loan online and no statements are sent to me. I'm just curious if I'll be paying the entire loan balance off or just what the car's worth. I bought the car in February 2006.

[HHM]

You will continue paying your monthly payment until the ENTIRE balance is paid. (unless you have owned the car for more than 910 days and do a cram-down).

[jdmc1973]

That's what I thought, I just wanted to make sure. Thanks!

[BearChaser303]

what is a cram-down?

[HHM]

A cram down is a way to strip the value of a lien holders secured interest, e.g. if you are upside down on your car, you can conceivably strip the unsecured portion of the lien.

For example, if you owe $16,000 on a car that has a current market value of $9,000, and you have owned the car more than 910 days, you can get a court order striping the balance owed to the creditor to $9,000. The $7,000 deficiency balance becomes an unsecured debt and is discharged in the BK. Cram downs are more common in chapter 13's, they are rarely used anymore in chapter 7.

[PaKettle]

Once I filed I could not pay my car payment via the net AND they quit sending me bills!

I luckily had an old bill laying around from the previous month and so I took that and copied it and use that to make the payments each month.

The thing I don't like about this is knowing that if I forget a payment for a week or so, they can repossess my car! (right?)

I mean, technically they could before the bankruptcy, too, but they'd be very unlikely to do so.

[BearChaser303]

A cram down is a way to strip the value of a lien holders secured interest, e.g. if you are upside down on your car, you can conceivably strip the unsecured portion of the lien.

For example, if you owe $16,000 on a car that has a current market value of $9,000, and you have owned the car more than 910 days, you can get a court order striping the balance owed to the creditor to $9,000. The $7,000 deficiency balance becomes an unsecured debt and is discharged in the BK. Cram downs are more common in chapter 13's, they are rarely used anymore in chapter 7.

I am in a chapter 7 so sounds like this would not be an option for me anyway, but just curious, does this work for leased cars too?

[biotechsolution]

I'm pretty sure you can only cram down an auto loan in a chapter 13. In a chapter 7 you either reaffirm or discharge.

In a 13 you must have purchased 910 days before your filing also.

[PaKettle]

I thought you COULD cram down in a Ch. 7...

Oh, I see now, in HHM's response, above that he says they are seldom used, but apparently can be used in a Ch. 7.

[HHM]

I am in a chapter 7 so sounds like this would not be an option for me anyway, but just curious, does this work for leased cars too?

Nope, does not work on leased cars.