Letting the Car Go

[mommyto3+1]

So I think the best thing will be to add the car into the bankruptcy. We owe 27K on it with a payment of 512 a month.

So my question is should I try to get a cheaper car now before we file?

I am not late yet on any payments but the next payment is due on the 30th and I don't think i will make it.

I have 4 small kids with car seats and such and worry that the repo man will come and take it, car seats and all. I park it in an attached car garage, will they pound on my door and some crazy hour of the night to get it?

We have yet to interview bk lawyers. We are at the very start of this process.

[Help!]

Are you sure you don't want to reaffirm that debt and keep it (if you'd be able to afford it when you discharge your other debt)? I don't think the car payment is unreasonable given your circumstances. If you get an old minivan (the only cheap alternative) through a trade and bury any deficiency in this vehicle in the price of the new one, you'd probably wind up with a $350/mo. car payment and another $100/mo. for car repairs. Not much of a gain. If it's worth less than you owe, it won't take anything away from your exemptions.

Cars can be tricky. We had this great idea that we'd pay off our car before filing - very big mistake! The worst part about it is that we got the money from a 401K (where the money would have otherwise been safe). We can't exempt the whole amount, so we are losing the car. These are things you don't know not to do until you learn how BK works. Ask a lot of questions and learn from mistakes like ours.

[mommyto3+1]

Can you explain what reaffrim means?

I was thinking of letting it go and buy with cash a 99 or 2000 minivan of some sort for 5K or less.

My van is worth 20K and I owe 27K

???

[PoorGrammyinBK7]

How long have you had the loan on the car?

If its more than 910 days and you do a Chapter 13, I think you can "cram down" the loan on the car.

I don't exactly understand that process - but I bet someone on this forum will!!

I think it means you include it in the Chapter 13 plan and you only end up paying the actual value of the car - not the total loan balance, and the car is yours after the 13 is done. I don't know how they determine the "value" though...

[mommyto3+1]

I think I have had the van for 2 years.

[PoorGrammyinBK7]

I think the 910 days is approximately 2.5 years

[Help!]

Can you explain what reaffrim means?

I was thinking of letting it go and buy with cash a 99 or 2000 minivan of some sort for 5K or less.

My van is worth 20K and I owe 27K

???

Reaffirming a debt means keeping it from being discharged if you file Ch. 7 (indicating on your petition that you intend to keep the vehicle and continue to make payments). Do not (!!!) pay cash for a car. It is to your advantage to finance a vehicle and make payments on it. I know it sounds really backward since the whole object of BK is to get *out* of debt, but paying cash for a car will hurt you in two ways: a car owned outright is an asset which will have to be exempted on your petition if you want to keep it (and you're only allowed to exempt up to a certain value of property) and if you file Ch. 7 you will lose the ability to claim the car payment as an expense on schedule J (making it look like you have more disposable income).

[AngelinaCat]

Can you explain what reaffrim means?

I was thinking of letting it go and buy with cash a 99 or 2000 minivan of some sort for 5K or less.

My van is worth 20K and I owe 27K
???

Reaffirming a loan means signing paperwork with your lender that you intend to keep paying for the vehicle. We did that with our car and a $2,500.00 OD protection loan with our CU. Check with your lender about their rules. We signed paperwork that our attorney provided, only to find that our CU wouldn't accept it. We had to sign and get notarized THEIR paperwork, which they then took to the court in their jurisdiction for approval. Our CU is in another state. You ONLY want to reaffirm a loan if you are ABSOLUTELY sure that can continue making payments on it.

That is something that you and the family will have to think on. My best~~~

[Summerbreeze]

Reaffirming a loan means signing paperwork with your lender that you intend to keep paying for the vehicle. We did that with our car and a $2,500.00 OD protection loan with our CU. Check with your lender about their rules. We signed paperwork that our attorney provided, only to find that our CU wouldn't accept it. We had to sign and get notarized THEIR paperwork, which they then took to the court in their jurisdiction for approval. Our CU is in another state. You ONLY want to reaffirm a loan if you are ABSOLUTELY sure that can continue making payments on it.

That is something that you and the family will have to think on. My best~~~

Did you have to reaffirm the personal loan in order to keep the car with the credit union? Are they willing to report your payments to the credit agencies? Were you able to negotiate the interest with them before signing the paperwork? Sorry for all of the questions but I might be in a similar situation but mine is with credit card and car loan through credit union.

Thanks

[Cali]

We have 2 vehicles, filed C7 a few almost 3 weeks ago, and we are letting one go back. My attorney told me that the company won't come get my SUV until discharge time, so I get to drive it until then. And I was 2 mths behind when I filed. I am saving the payment amount now to get a car after discharge.

So I think the best thing will be to add the car into the bankruptcy. We owe 27K on it with a payment of 512 a month.

So my question is should I try to get a cheaper car now before we file?

I am not late yet on any payments but the next payment is due on the 30th and I don't think i will make it.

I have 4 small kids with car seats and such and worry that the repo man will come and take it, car seats and all. I park it in an attached car garage, will they pound on my door and some crazy hour of the night to get it?

We have yet to interview bk lawyers. We are at the very start of this process.

[deafbroke]

A few things. I would let the car go. Also I would look for something cheap and get a loan on it, just make sure what it is worth is less than the states allowable exemption for cars in your state, your attorney will know what that is. Don't pay cash, and the $5000 cash on hand, be sure your attorney has the room in your exemptions to save it or it will be taken from you by the trustee. If you don't have room then spend it on necessities or as part of a down payment on a car but again make sure it's worth less than states exemption.

DB

[mommyto3+1]

How do I find out what my states exemptions are? I am in MI.

Thanks.