Finally filed chpt 7. Yippeee. How do I re-negotiate auto loan?

[Doghouse]

My lawyer finally filed my chpt 7 bk last Friday after waiting and doing pre bk planning since Oct '08 when I stopped all cc and mortgage payments. My 341 is in 5 weeks.

I was current on only my auto but missed the last payment (intentionally) which was due April 15th hoping for some negotiating leverage. I owe just under 14K with about 2yrs left on a 5 yr loan. Kelley Blue Book value is 21K for private party, about 18.5K for trade in, and 24K for dealer retail value. It's a 2006 SUV and in good to excellent condition. And yes, I did protect the equity in the car here in California.

My Notice of Intent states I want to re-affirm but I do not plan to sign a re-affirmation agreement if the CU sends me one. However, I do want to keep the SUV. Monthly payment is $500 (5.58% int). I want to knock down the monthly payments so I hope to renegotiate. Lawyer says I can negotiate with the CU thru their (lawyer's) office.

Since I am officially filed now, do I contact the CU due to the automatic stay which prevents them from contacting me? When should I begin to contact them? Should I negotiate myself or use the lawyer? If you've negotiated before, can I get them to reduce the balance or just the interest?

[StartingOver08]

Yes, you contact the CU. I renegotiated my loan with the CU directly - they have a BK dept set up to do these things. I was able to negotiate the interest rate, the payments, skip a payment etc.

[Doghouse]

Thanks StartingOver08. How soon after you filed did you call them and start renegotiating? I am so far 16 days late. Thinking of waiting till I am at least 30 days late on May 16th. I filed the bk on April 24th.

[StartingOver08]

That's a good plan. I waited a while too. In the meantime the CU sent the regular reaffirmation to my attorney so I could read exactly what they wanted to do, which was to reaffirm the entire amount + $4000 from a credit card balance cross collateralization. Naturally, one of the first things I renegotiated was removal of the excess $4000 and removal of all cross collateralization, the interest rate, the payment amount, the length (added a couple of months only) and I had them put in they will turn the title over to me promptly upon payment in full.

[atlbankrupt]

I would wait at least two weeks.

[Doghouse]

Thanks for the info. I would wait at least another two weeks and maybe only after they've sent the re-affirm agreement to my attorney. StartingOver08, I'm taking it that you did not sign the re-affirm agreement. I don't plan to sign and will see where the CU stands on that. Will they renegotiate and accept new terms without me signing a re-affirm agreement? Will find out soon.

[StartingOver08]

Actually, I did sign a reaffirmation - just not the first one they sent!

When we renegotiated the entire reaffirmation, the CU put it in writing and signed it and then sent it to my attorney. I reviewed to make sure everything was exactly as negotiated, signed and my attorney signed and then it was filed with the court.

The CU is also reporting to the CRA's paid as agreed and never late (because I was never late either before or after the BK).

Now I also tried with another car with another lender - but was not successful and had to surrender. So YMMV.

[AfraidOfBK]

Starting over,
you said you had one successful reaffirmationw ith negotiation. Then the other car with the other lender didnt work and you ahd to surrender....

Is this standard? I mena, if i attempt to negotiate with my car loans (i have not missed any pmts with either of them) and the creditor does not agree, then will they simply repo the car?

Is it possible for me to attempt to negotiate, and then if it doesnt work, still keep my good standing with them on my current loan agreement? Id lie to give it a shot, but I dont want to risk losing the cars either. THanks

[kvangild]

I have filed my bankruptcy case back in April and I wasn't aware that you could renegotiate the terms with the auto-lender. I did intend to re-affirm the car loan but now I will have to explore this matter further.

[StartingOver08]

The other lender I had was crazy! They would not negotiate the amount, the rate or even change the due date. By the way, I was current with them and had every intention originally of keeping the car.

BUT, I had an epiphany during the BK process because of this board (thank you!). I was upside down to the tune of about $8k (owed $19k and it was worth only $10-$11k by real numbers - not NADA values!). So, when the lender did not negotiate the balance or the rate I decided to surrender. I was current even during the auto stay period, but on day 59 I changed my mind and recorded a new Statement of Intentions surrendering the vehicle. Made arrangements for the lender to pick up my car at a neutral location. I am so glad I did - it is better to negotiate from a position of strength, meaning if you don't get your terms you give the car back to them. You only get to do this in BK.

Day after discharge I bought an older SUV - I am happy.

[AfraidOfBK]

Starting Over,
i can see how that could make sense in your situation...i just have no money to buy another car after bk.

also, do you know if you ahdnt surrendered if they would have still let you keep it? I just dont want to jeopardiz emy chances of keeping hte car. It is a used 2007 with low mileage. financed for 18k probably worth 15k payment with extended wwarranty if 333/month.

Lawyer told me that unless the car is worth 5k - 15k a 722 redemption is not usualy smart because the rate will skyrocket and the savings wont be worth it. Why would people do a 722 if the lender is willing to work out a negotiation...by the way, who was your lender, if u dont mind my asking.

This car is with wachovia dealer svcs.

[StartingOver08]

The uncooperative lender was Independent Bank in Memphis TN.

I didn't have much money either for the SUV - its old (2003), and I have a small payment for 18 mths total (less now). It is not worth it to me to get in debt again.

[Doghouse]

Ah, so you did sign a re-affirm. I may not be in a position of strength because my SUV has 4k to 6K equity in it but I shall try. Hopefully the dismal car market, especially for SUVs may work in my favor. I just want to reduce the payment amount and interest rate (and maybe, but unlikely, the principal owed since they'd get less at an auction anyway if I surrendered).

[StartingOver08]

Doghouse, make sure you know the actual value of your SUV - not the value the Trustee's use. I did a search for my vehicles before I negotiated so I had the current market figures right in front of me - not the one's they forced me to use in our district (NADA Retail).

[Doghouse]

StartingOver, my attorney used a value of 18K for the SUV. Almost all ads I've seen for the same vehicle in good condition is in the 19K to 24K range retail.

And ouch, I just noticed that the amount on my schedule D shows I owe 15K to the CU instead of the actual amount of 13.7K because she used last qtrs statement I had given. The estimated value of 18K is over the 15K by about 3,000 which is less than the max exemption of 3,300 a for car in Calif (although I still some of the wildcard to use and protect the rest of the equity). Now the diff will be about 4,300 which is over the 3,300 max.

Looks like I need to contact attorney Monday to maybe amend the petition, if necessary.