cramming down the car loan

[AfraidOfBK]

Keep in mind, we are talking about bankruptcy; in bankruptcy, the cram down (the reduction to FMV) is forced, not negotiated. I have yet to hear of anyone getting a meaningful result from a private negotiation with car lenders.

So let me understand this.....

What do you mean by "forced" ????
If I went into a Ch 7 wanting to keep my cars (I am current) and I tried for a cram down (in some manner, be it 722 or whatever) then they don't want to work with me....do I lose the car or can I still keep paying and do a ride through?

I dont want to risk trying for a cram down if it iwll hurt my chances of keeping cars. If it is forced, does that mean they will only try to cram down the loan if I have a low income or something? Are there qualifications? Thanks to everyone for your experiences.....

[NoMoreRed]

So do I have some play here then? Does the trustee come back and say he agrees to let us redeem the car for $X and we have to use that amount or can I take an appraisal in with my intention and request that amount?

You have the right to 722 Redemption through the BK code. If you're using an attorney then the motion for redemption would be filed by the attorney with the court. After it goes into a 20 day period to allow the current lender to contest the motion. If they don't then your attorney will probabaly file a motion of no contest for the 722 Redemption. Then the judge will sign the approval. It's up to the BK judge. Once it's signed by the judge it's a done deal.

.....at least that's how it worked when my attorney did it in AZ.

[AfraidOfBK]

so basically if you file for a 722 and the bank does nit fight back, they HAVE TO cram down the loan amt?

Also, if they DO contest, then does that mean they will automatically try to repo car or will they let you keep it (either thru a ride through or a reaffirmation)??

I am in Nevada for anyone who knows. Thanks, Red, for your info....

[NoMoreRed]

so basically if you file for a 722 and the bank does nit fight back, they HAVE TO cram down the loan amt?

If the judge signs the approval then they will have to. 722 Redemption will send you all of the paperwork for US Bank and then US Bank will pay the crammed down amount to the current lender. The current lender will have to transfer the title of the vehicle to US Bank.

Also, if they DO contest, then does that mean they will automatically try to repo car or will they let you keep it (either thru a ride through or a reaffirmation)??

I am in Nevada for anyone who knows. Thanks, Red, for your info....

What our attorney told us is that if the current lender contests the motion for 722 Redemption they would then send a counter offer. IF they reject that then you still have the opportunity to reaffirm (only recommended if it's a good deal or in your best interest) or perhaps do a ride through. In our case the lender did not contest it so I can only base my comment on what our attorney told us.

[AfraidOfBK]

what makes the judge fight for a 722 redemption in the first place? Does hehave to see that you "qualify" or really could use a lower pmt? We have fairly good interest rates on out loans (fairly new loans) and they are spread out over 6 yrs and 8 yrs.......

BUT - they are well over market value. Is this instant qualification, being that its an overpriced loan?

ALSO - You mentioned US Bank, is it always US BAnk or were you simply giving an example? I understand now that it is an entirely separate bank and a new loan (almost like refinancing in BK?!) Do you then ruin your relationship with the other bank that the car was previously financed with? Just curious.

[NoMoreRed]

I only know of US Bank funding for 722 loans. The judge will look at your financial situation and make the approval based on that and that alone. In some cases the judges will not even approve a reaffirmation if the payment is going to put you at financial risk. As far as the relationship with the current lender goes....you'll most likely need to find a bank that you currently do not have any debt with and use them for your checking and savings accounts. This is usually recommended anyway. By filing BK your relationship with any financial institution will be hurt just because of the BK being on your record. Time and how you handle your finances after discharge will be what helps repair those relationships. You just have to do what's best for your financial future.

Just give the 722 Redemption folks a call. They will be able to tell you on the phone if they are able to help you out. You're not obligated unless you go through with the whole process and sign the paperwork which won't happen until a judge approves it anyway.

[LuciluS]

My husband's 2006 Dodge Dakota is through US Bank. I called them about 6 weeks ago and was told we did not qualify for a 722 redemption because it was for only new customers.

Soo, are you saying our Attorney could request from the judge a cram-down & US Bank would have to honor it? Our payments are $479 a month until Aug. 2013. We bought it in 4/07 with payments deferred for 3 months.

Luci

[AfraidOfBK]

i only have a checking acct and savings acct with us bank (In fact, i only just opened those accts to get away from B of A where my debt was - BK planning!)

Will this work in my favor?? ALso, how does one try to guess if the judge will/will not determine your payment to be a financial hardship? I have two cars, payments of 480 and 333...is this outrageous in the judge's eyes?