What to do now?

[rountrac]

Filed chapter 7 , Had 341 meeting last Thursday, Have said from the start I would keep all cars. We have 3. 1 with one bank and 2 with credit union.Which we also had a CC with the credit union. The 1 with the bank I signed a refirm with right after 341 meeting, while in the meeting the credit union stepped up and said the only way to refirm the 2 cars is to refirm everything including CC. Told them I was willing to refirm cars and was told all or nothing. The CC has a 20k balance..Waiting to talk to lawer on Mon..My lawyer sent a fillin to 341 meeting and when i ask him about what they offered he said the ball is in there court now, as to what to offer now...Any tips to help me out ??? thanks

[lrprn]

Filed chapter 7 , Had 341 meeting last Thursday, Have said from the start I would keep all cars. We have 3.

Do you have three licensed drivers living in your home? Typically the local trustee will allow a Ch 7 filer to keep one car for each licensed driver in the household, or the cars that your state's auto exemption + wild card (if your state has one) can protect. Another option can be to pay the trustee for the value of the cars that is not protected by your state exemptions. How does your situation match up with these particulars?

1 with one bank and 2 with credit union.Which we also had a CC with the credit union.

Oh man.....credit unions can be really difficult to work with when you file Ch 7. Do you happen to have any checking or savings accounts with the credit union? If you do, watch out for cross-collateralization. Credit unions are notorious for using cross-collateralization clauses in your credit card and other loan applications to take money from checking and savings accounts to make up for arrears when you file. Have you had any troubles with that?

The 1 with the bank I signed a refirm with right after 341 meeting, while in the meeting the credit union stepped up and said the only way to refirm the 2 cars is to refirm everything including CC. Told them I was willing to refirm cars and was told all or nothing.

Welcome to the joys of trying to work with a rigid credit union during bankruptcy.

Frankly, most lawyers will advise their bk clients to *NOT* sign reaffirmation agreements when their cars are worth significantly less than they owe on them.

You haven't shared how much your cars are worth and if you can protect their current values with your state exemptions. Where do you stand on that with each of the three cars? What state did you file in?

When did you purchase each of the three cars? Were any of them purchased more than 910 days before you filed?

The CC has a 20k balance..Waiting to talk to lawer on Mon..My lawyer sent a fillin to 341 meeting and when i ask him about what they offered he said the ball is in there court now, as to what to offer now...Any tips to help me out ??? thanks

Once you share more information about the value of your cars, when you purchased them, and whether they can each be protected with your exemptions, then we might be able to help you sort out what your realistic options are in this situation.

In general, it is not a good idea to reaffirm on autos. No matter what the credit union tells you, signing a reaffirmation agreement is voluntary. They cannot force you to sign one. And piling on $20K extra on top of keeping the loans permanently tied to you no matter what happens in the future just to keep your two cars you financed with them....that's ridiculous. You could buy two reasonable, nice 'new to you' cars for that amount.

However, as I said, we need more information to get a sense of what's going on in your situation to help you sort out what makes sense in your case.

[fyi2]

fingers crossed

I am way over on my auto
i am going to ask to redeem at the market value (fingers crossed)
i have Chrysler Financial and i have been told that because of the financial mess they are in they most likely wouldn't budge and just take the car back
on the other hand another person said that is exactly why they would budge

The 722 loan (right loan?) sounds scary with such a high interest rate but if i went to a carlot fresh from a BK i imagine it will be scary high there too

[JRScott]

Basically if its a choice between having to reaffirm the credit card debt to keep the other vehicles, let them go it just isn't worth it. You can make the offer for a redemption on the cars or see what they offer but if they attach the credit card debt to any redemption I would just flat out refuse to.

[rountrac]

Yes, there is 3 licensed drivers in home, as far as the car values, all 3 are right where i like on there balance..could not buy others for the amount owed...Only one has been purchaced 910 days before filling. As far as a savings account with them, yes i do but it only has around $25 in it.. Im in AL..Really surpised me when they said all or nothing...Do you think they will talk about lower my balance on CC if i reafirm..Can they keep charging interest and late payments..or can i agree on a balance to repay...think they will lower balance ??

[JRScott]

If you reaffirm the debt they will continue charging interests, late fees, overthelimit fees, etc whatever the law allows. I doubt they'll work with you but you could always ask your lawyer to see what sort of reaffirmation deal they ask for.

Now you say 3 licensed drivers? Do all three work, and could you carpool? I know teenagers seem to think they deserve their own car but it isn't always the right thing. I seriously would not sign any reaffirmation with any of the CC debt it'll just put you back in this same position and there is also the likelihood the judge wouldn't approve it.

Now the bigger question I suppose is do you need the car expenses to stay in a chapter 7? If that's the question here you might need to talk to your lawyer and see what options you have. 722 loans are high interests but still it might be better to take one of those to make sure you meet the 722 and let the cars and credit card debt you have go because unless your paying 20k more in interest for it its better to go with a new deal.