Repo before bk? or just don't reaffirm?

[meggie]

Hello!

I am planning on doing a voluntary repo on one of my two cars. I will be filing CH7 in June (waiting because of a tuition thing at school, I want to be sure I can graduate and be able to get my last semester of govt financial aid. )

I had a nice car, $265 monthly payment amount, around $6500 left to pay it off. Value is about the same as the payments I have left. 2007, reliable, 40mpg.

I got nervous that I wouldn't be able to ger a car post BK. I don't really know what I was thinking, the car I have had this whole time is newish and works great. I thought it would help me with the means test so I went to get a new car with the intention of selling my old one. The dealewr lowballed me on the trade in so I was going to list it on craigslist. Right now I have both cars in my posession and I am continuing to make on time payments on my old car.

Looking at my budget, the new car is $416 a month and insurance is more expensive, it also gets lower mpg.


What is the best time to turn the new car in? They probably won't be looking for it for a while, I still haven't recieved the first payment statement.

My cheaper, older car (which I have not tried to sell yet) is a good one and I am fine for the means test with that car payment. I don't know what I was thinking.

Should I wait until june and then just not reaffirm? Should I turn the car in now so that the amount of money I owe will be finalized by june and be included in the bankruptcy? Should I just let them come and get it from my house?

I have no idea what I am doing.
How can I make this less complicated?

I would love to keep the car but I can not afford $416 a month.

Any input is appreciated, I love you guys!

Meg

[StartingOver08]

I would surrender the car you don't want in bankruptcy. It certainly looks better than a repo. You only have three choices, reaffirm, redeem and surrender.

As to waiting, BK will not affect your financial aid at school. Please do a search on this site. It will give you the details.

[meggie]

Ok great, thanks for the advice.

I wonder if I should leave it outside of my house or what to do...

Also, about hte loans...
I have searched. There may be a chance that the loan will not be funded while my bankruptcy case is open. I know I can get them once it is discharged. I don't want to blow my graduation over a couple of months.

[debtmonster]

What is the trade-in value of the car? Cars are worth nothing now.

I owe $12,000+ on my car to pay it off and I've been doing a KBB on it and as a trade to get rid of it, it's worth about $4000-5000. That's what the bank will get if they try to auction it off once it's repo'd. That's why I am thinking of doing a 722 redemption. I am wondering what they can do to get my payments down or knock a year or two off of the financing. Yeah, higher interest rate, but if they can knock $6000-8000 from what I owe, that's worth it.

[meggie]

Trade in value was around 6k. I see people selling them on ebay and craigslist for 7-13k.

I guess it doesn't matter because I need to keep the old one, which is still a great car.

I will not be able to afford $416 a month if I dump the old car and keep the new one.
I seriously doubt that I can hang onto it until june...

[debtmonster]

That's the same problem I am having. I went to some car lots an explained the situation. I told them I am looking at going bankrupt and they're telling me that all of the old, used cars they have would cost me in the $400+ range, which is more than I'm spending now. I want the payments to go down, not up. I was hoping that a 722 Redemption would get my payments in the very low $200 range by refinancing $5,000 to $6000 at 36 months at 20% interest. I don't plan to re-affirm anything. If they want to take the car, then so be it. Then they can be responsible for auctioning it off and getting NOTHING for it. They won't be coming after me for no deficiency balance once I go Chapter 7. I hope to God that my next commission check is big enough so I can pay off the retainer on my attorney. I have $1400 to go.

If they could only let me keep my car for 4 months, I could save up cash for a used $3,000 cash and be done with it. I will stay at my house rent-free for as long as possible so I'd be using that money to pay towards the car.