Renegioate loan for Reaffirm.

[Rick9972]

We have one car loan through Citi Finance. I am not interested in keeping it as we owe alot more than it is worth and the rate we got was not good.

We filed a 7 and listed that we did not want this vehicle. DW asked me last night, if I thought Citi would renegioate the auto loan if we would reaffirm?

For this to be a possiblity 8000 would have to be dropped from the balance and the interest rate dropped to 8 percent. Does this ever happen?

Thanks

[HHM]

Why not do a 722 Redemption?

722 redemption is an option to refinance your vehicle at its current market value. In chapter 7, if you have a vehicle on which you owe $18,000 but the vehicle is only worth $10,000, you can buyout the lender for $10,000. Now, you need to get financing, www.722redemption.com (US Bank) is the only bank I know that does it. The other benefit of doing a 722 redemption is that since it is post filing credit, it counts toward restablishing your credit. With 722 redemption, you don't need to negotiate with Citi (although they may quibble over the cram down price).

The interest rate will be higher, but the tradeoffs still usually result in a lower payment and better deal.