Chapter 7 and Assets: Cars with an Outstanding Loan

[InDebtNeedHelp]

Chapter 7 and Assets: Cars with an Outstanding Loan

If I file for Chapter 7 BK, what would happen with the following car:

1. Payments are caught up/current
2. Paid $18,000 for the car
3. Owe $10,000 on the car
4. The car is now worth $9,000

MO law says there is a motor vehicle exemption for up to $3,000.

Thanks,

InDebtNeedHelp

[cool33097]

Dou you want to keep the car?

[InDebtNeedHelp]

Not sure right now. Please give me an answer for both yes and no. Thanks.

Dou you want to keep the car?

[TEW]

You would have to pay the trustee 6 k to keep the car
or the trustee will pay you 3 k cna take it

[InDebtNeedHelp]

The trustee would pay me 3k? In cash, or toward exemptions?

Why would the creditor want the car when I owe more than it is worth? Why couldn't I affirm that loan and keep paying?

You would have to pay the trustee 6 k to keep the car
or the trustee will pay you 3 k cna take it

[AngelinaCat]

Yes, you can reaffirm and keep paying. That is what we did because we knew we wanted to keep the car. But you can possibly do a 'ride through' if your bank will allow it. In this scenario, you don't reaffirm, but you keep onpaying anyway, as if you were going to keep the car. Down the road, if you decide not to keep it, then you won't be held responsible for the difference not paid, as you would be if you reaffirm.

Does this make sense? I haven't had my coffee yet.

[InDebtNeedHelp]

That makes sense for all parties. Thanks.

Yes, you can reaffirm and keep paying. That is what we did because we knew we wanted to keep the car. But you can possibly do a 'ride through' if your bank will allow it. In this scenario, you don't reaffirm, but you keep onpaying anyway, as if you were going to keep the car. Down the road, if you decide not to keep it, then you won't be held responsible for the difference not paid, as you would be if you reaffirm.

Does this make sense? I haven't had my coffee yet.

[Tbornetun]

Regardless if you are keeping it or not, you don't have any equity in the vehicle if you owe $10,000 and it is worth $9,000. The trustee cannot/will not take anything, you don't even need to exempt it because there is nothing to exempt. Exemptions are not even relevant in this case. You can use your $3000 to exempt another car, if you own another.

If you plan on keeping it, make the payments. If you want to surrender it, don't.

[jack81]

I have a car that was manufactured in 1999 and owe 18,900 on it. I believe it's booked at $15,000. However, most banks don't want to touch a 10 year old car for obvious reasons. EX; no warranty, possible issues, condition and no other bank will loan money on a 10 year old car. I think there's only a few that go to 5 years now. Correct me if I'm wrong. I might try the ride through method on this though.
P.S
Do banks use Nada, Kellys Blue Book or Galvs? I know they go off wholesale though.

[InDebtNeedHelp]

Thanks for the great information.

Regardless if you are keeping it or not, you don't have any equity in the vehicle if you owe $10,000 and it is worth $9,000. The trustee cannot/will not take anything, you don't even need to exempt it because there is nothing to exempt. Exemptions are not even relevant in this case. You can use your $3000 to exempt another car, if you own another.

If you plan on keeping it, make the payments. If you want to surrender it, don't.

[ansky0007]

You would have to pay the trustee 6 k to keep the car
or the trustee will pay you 3 k cna take it

These figures make no sense. There is $1k in equity and the $3k exemption would well cover that if they want to keep it. If he returned it since there is no equity in it the trustee would not pay them to take it.

[Tbornetun]

These figures make no sense. There is $1k in equity and the $3k exemption would well cover that if they want to keep it. If he returned it since there is no equity in it the trustee would not pay them to take it.

There is zero equity. None. No exemption necessary.

[InDebtNeedHelp]

Is the $3,000 MO exemption a total, or is it per car? For married filing jointly, would we get $3,000 per car?

[Tbornetun]

I'm sure it is total, unless if you are allowed to double because you are filing jointly. But on the other hand, if you had 3 $1000.00 cars you could exempt them all.

[Dirk Squarejaw]

I think a new option needs to be added to the poll in the "Why Are/Have you filed BK?" thread: Math.

InDebtNeedHelp, please listen to Tbornetun.