Good News re: Car Repo

[mccaverty]

Just got a letter today from the bank letting me know that they will be auctioning my car and NOT seeking the remainder of the balance if the car sells for less than the full amount of the loan!

[dingdong]

Yay!

Good for you!

[relief13035]

That's great news. Haven't heard that before.

[kenshirley]

I call that a "stay in contact" ploy.
They want to know where you are so that when it is sold they can send you a deficiency notice of what you owe.
Time will tell.

[mccaverty]

Did that sort of thing happen to you, kenshirley?

[Nicollette]

Just got a letter today from the bank letting me know that they will be auctioning my car and NOT seeking the remainder of the balance if the car sells for less than the full amount of the loan!

I would definitely hold onto that letter as proof just in case the bank does try to collect the deficiency balance.

[kenshirley]

Did that sort of thing happen to you, kenshirley?

No, but I have been involved in finances in many aspects in my life and my father was a car dealer and a repossessor in later life before he died.
You might say I know the business petty well and I have never ever heard of a company writing off a debt unless it was so small that it did not pay them to pursue it.

[debtmonster]

I was wondering, if you wanted to keep the car, is there any way you can get the negative equity stripped off of the loan without having to refinance through a 722 redemption after filing a Chapter 7?

I'd rather keep the 5.9% interest and just have them knock off about $8,000 in negative equity. It's going to be a real pain to hurry and save up the mega bucks I will want for the next car if I give this one back soon. I just can't see paying $12,000+ interest for a car that is worth nearly $4,000 today. I have another 4 years left of payments on a 6 year loan and I've racked up over 5 years worth of mileage in 2 years.

I'd be happy if they knocked it down to $6,000 and made me re-affirm that if I had to. I just would not re-affirm $12,000.

Will they do a loan modification on a car?

[StartingOver08]

You could try to modify the loan in your reaffirmation - or do a cram down. That is what the 722 redemption thing is for - but usually they have 'standards' for the vehicle (age, number of miles etc).

Course, if you have a family member or other resource that can help you with the $4k, it is worth trying to cram down the vehicle loan in the BK and then pay the family member back after your discharge.

Why don't you contact the BK dept yourself and offer to reaffirm the $4000 and see what they say - you can always go up to $6k if you need to - but you are right - paying an extra $8k is not worth it IMO. In the reaffirmation agreements you can negotiate all terms - length of loan, interest rate, principal balance etc. Some lenders cooperate - others do not.

[debtmonster]

You could try to modify the loan in your reaffirmation - or do a cram down. That is what the 722 redemption thing is for - but usually they have 'standards' for the vehicle (age, number of miles etc).

Course, if you have a family member or other resource that can help you with the $4k, it is worth trying to cram down the vehicle loan in the BK and then pay the family member back after your discharge.

Why don't you contact the BK dept yourself and offer to reaffirm the $4000 and see what they say - you can always go up to $6k if you need to - but you are right - paying an extra $8k is not worth it IMO. In the reaffirmation agreements you can negotiate all terms - length of loan, interest rate, principal balance etc. Some lenders cooperate - others do not.

None of my family members have any money. My father is 70 years old and he works only for health insurance for his wife. His paychecks only come out to $2 to $15 per week net after they take out his health insurance.

My mom has been unemployed for 2 years. No way I can borrow the $4,000 from anyone. Everyone is as broke as me and living on credit cards just to get by.

I tried a 722 redemption company. They said the limit on miles on my car is 60,000. I have 70,000.

I don't have anything in my favor to work with.

Because of the miles on this car, if they auction it at a repo auction, the dealer who buys it won't be able to sell it as a certified pre-owned since it's way over to 50,000 mile mark.