3 Main Concerns re: Ch. 7

[MNGurl]

I hope someone can answer these questions for me. We are going to our attorney this Friday to pay the balance to file our case. We are in California. Here's what I need to know:

1. Our Truck - We have a 2005 Ford F-150 making payments of $420/mo at our credit union (and are current). This is the only loan we have with the credit union. We have both our payroll going into this account. We're going to re-affirm this. Do we need to stop our automatic payroll being put into our account if we are going to re-affirm it? Should we renegotiate our truck payment?

2. Our house - we're upside down - we owe $328,000 and it's worth about $190,000. (I'm in real estate industry/office manager). The loan servicer says they don't do loan mods. We plan on moving in about 3-5 years out of state when my husband retires. Should we just not re-affirm it and then walk when we decide too leave? We are in a pick-a-payment A.R.M.. We've only made minimum payments, but that soon (November) wont' be an option any longer and it'll go to interest only payments or fully amortized payments. We can make the interest only payments I think, but not the fully amortized, so would it make more sense to just not re-affirm, stay in there as long as possible and then just rent?

3. We have a Travel Trailer - we are current. Payments are $240/mo. Should we keep this and re-affirm so we can include it as one of our monthly expenses (It has been for 3 years). or should we surrender it and when would we do it? We owe $18,000 on it and I'm sure the Blue Book is quite a bit less.

So we have a truck payment of $460.00, a RV payment of $240.00 and a house that's upside $140,000. We have one other car that's worth about $1800. That's it. Any advice would be greatly appreciated.

[kenshirley]

Just that we had the same 2005. Ours was an XLT Supercab, very low mileage and still with one year of factory warranty on it when we sold it about a year before we filed.
It only brought $14k on today's market.
Consider the fact that they are almost giving away new trucks to sell them today so it really devalues the used ones.
I don't know how long you have to pay that $460 or $420 payment on it to your credit union but consider the payout on your truck before you keep it.
We surrendered our home too and went to a rental for the time being and I think that for you too is a good decision.
The travel trailer. Do you really need it? If you owe $18k on it and it an be towed by an F-150 you owe too much on it. Sorry, just the facts.
I rv'ed for 40 years so I know that TT can't be all that heavy or you are overloading the F-150.
As an example of RV values, we surrendered a motor home that was mint condition and only 4 years old with 11K miles on it. We had paid $110K for it some 16 months before. It took 5 months for B of A to get $48K out of the RV.
Do you really want to run the risk of having to sell that TT on today's market down the road should something else happen?
Just my advice.

[liz417]

I hope someone can answer these questions for me. We are going to our attorney this Friday to pay the balance to file our case. We are in California. Here's what I need to know:

1. Our Truck - We have a 2005 Ford F-150 making payments of $420/mo at our credit union (and are current). This is the only loan we have with the credit union. We have both our payroll going into this account. We're going to re-affirm this. Do we need to stop our automatic payroll being put into our account if we are going to re-affirm it? Should we renegotiate our truck payment? I don't know if a CU will negotiate with you on the car payment, they are pretty notorious for being hard. If you don't reaffirm, I would recommend that you stop your direct deposit on your payroll check, because most CU that clause regarding "cross-collateralization"...

2. Our house - we're upside down - we owe $328,000 and it's worth about $190,000. (I'm in real estate industry/office manager). The loan servicer says they don't do loan mods. We plan on moving in about 3-5 years out of state when my husband retires. Should we just not re-affirm it and then walk when we decide too leave? We are in a pick-a-payment A.R.M.. We've only made minimum payments, but that soon (November) wont' be an option any longer and it'll go to interest only payments or fully amortized payments. We can make the interest only payments I think, but not the fully amortized, so would it make more sense to just not re-affirm, stay in there as long as possible and then just rent? I would say to just not "reaffirm and walk away from the house at that time. We are "underwater" too on our home, but the payments are affordable and we like our house, but we don't plan on reaffirming which gives us the option of walking away at a later time if the economy is still in the dumps.

3. We have a Travel Trailer - we are current. Payments are $240/mo. Should we keep this and re-affirm so we can include it as one of our monthly expenses (It has been for 3 years). or should we surrender it and when would we do it? We owe $18,000 on it and I'm sure the Blue Book is quite a bit less. If you really want to keep it, CA has a great Wild Card exemption that you could protect it under. Is this payment/expense "helping" you qualify for a ch 7?

So we have a truck payment of $460.00, a RV payment of $240.00 and a house that's upside $140,000. We have one other car that's worth about $1800. That's it. Any advice would be greatly appreciated.

Just a couple of questions, is this the 1st time you are meeting with your attorney? Are you over/under the means? Have you plugged in your numbers here: legalconsumer.com to see *if* you qualify for a ch 7 or 13?

[jribe]

I would seriously consider getting rid of that truck. There are so many great incentives now on purchaes- you don't say how much you owe- but i bet you can get something for less and in better condition. Credit unions are pretty notorious for being difficult on lowering payments, interest etc. They say this is because they're "not for profit" or don't have the resources like the big banks. So i wouldn't expect to get much help from them.

I would get both of your direct deposits changed right away to a bank or credit union that you have no debt with. Credit unions are also popular with cross collat. clauses.

I would also look at just letting go of the house. Many are saying there's no real end in sight for the bottom of the real estate market; and that prices will never go as high as they were at the housing boom peak. I don't think you could make up the difference in 3-5 years.. If your credit is still okay and you have decent income (usually 3x the rent) i would look for a nice rental. There's plenty out there in CA!

I hope someone can answer these questions for me. We are going to our attorney this Friday to pay the balance to file our case. We are in California. Here's what I need to know:

1. Our Truck - We have a 2005 Ford F-150 making payments of $420/mo at our credit union (and are current). This is the only loan we have with the credit union. We have both our payroll going into this account. We're going to re-affirm this. Do we need to stop our automatic payroll being put into our account if we are going to re-affirm it? Should we renegotiate our truck payment?

2. Our house - we're upside down - we owe $328,000 and it's worth about $190,000. (I'm in real estate industry/office manager). The loan servicer says they don't do loan mods. We plan on moving in about 3-5 years out of state when my husband retires. Should we just not re-affirm it and then walk when we decide too leave? We are in a pick-a-payment A.R.M.. We've only made minimum payments, but that soon (November) wont' be an option any longer and it'll go to interest only payments or fully amortized payments. We can make the interest only payments I think, but not the fully amortized, so would it make more sense to just not re-affirm, stay in there as long as possible and then just rent?

3. We have a Travel Trailer - we are current. Payments are $240/mo. Should we keep this and re-affirm so we can include it as one of our monthly expenses (It has been for 3 years). or should we surrender it and when would we do it? We owe $18,000 on it and I'm sure the Blue Book is quite a bit less.

So we have a truck payment of $460.00, a RV payment of $240.00 and a house that's upside $140,000. We have one other car that's worth about $1800. That's it. Any advice would be greatly appreciated.

[mamaluv]

With my CU, once they find out you have filed they shut down all of your accounts. They sent me a letter saying to proctect their interests, I will no longer have access to my checking or savings, etc. It was not a big deal, I had a total of $12 combined in the accounts. It was never my primary checking anyway. I would look for a new bank/cu in case yours does the same.

[MNGurl]

Just a couple of questions, is this the 1st time you are meeting with your attorney? Are you over/under the means? Have you plugged in your numbers here: legalconsumer.com to see *if* you qualify for a ch 7 or 13?

We intend to re-affirm the truck as we love it and I feel safe in it. I don't think we could get another truck loan right after our BK anyways. It has a Banks system in it that makes it more than capable of pulling our travel trailer (plus our truck has a bigger engine/more torque than a normal F-150).

The RV we would keep as if we just do the ride-thru on the house we could live in the RV if we had to and when my hubby retires in 3-5 years we intend to use it much more - we'll be snowbirds in MN and spending winters in New Mexico in our Rv, and it's a tax right off as a 2nd home.

The CU where we have the truck payment - we have no other loans or anything, so I would hope they wouldn't shut down our account especially since we'll be reaffirming our truck payment and there is no other cross-collateralization.

Our house - we won't re-affirm and we'll just stay until we can't make any more payments - our Loan Servicer isn't modifying loans anyways so as long as we can make the payments we'll stay and then rent til my DH retires in 3-5 years.

One other question - we got served by a creditor and while I thought our court date wasn't until November, after we answered the summons we were given a date of August 24th for a meeting. Are there always two dates for this? We obviously owe the money but we had wanted to wait until November to file (per our attorney) and include that in our BK. We are in California, so any help would be great as too what this 1st meeting is for - possibly arbitration or something?

[OhioFiler]

We intend to re-affirm the truck as we love it and I feel safe in it.

Don't make a mistake because you "love" your inanimate object. Do a ride-thru on the truck the same as the trailer and mortgage. Keep up the payments until you fall out of love with the truck.

[MNGurl]

Okay, the truck is useful because it pulls the trailer we may have to live in some day...and I feel safe in it.

I don't think we can do a ride-thru on the Travel Trailer (GEMB) or the Ford F-150 (credit union loan)?

[OhioFiler]

Okay, the truck is useful because it pulls the trailer we may have to live in some day...and I feel safe in it.

I don't think we can do a ride-thru on the Travel Trailer (GEMB) or the Ford F-150 (credit union loan)?

Keep current on the payments and I'll bet you can do a ride-thru.

[kenshirley]

You asked for advice and obviously don't agree with many of us but that's your option.
If you reaffirm and find you cannot make the payments and you are a chapter 7 you're stuck with the loan and/or deficiency balance.
Be certain before you make the choice.
You are also assuming that they will let you keep the trailer. Our attorney told us that the courts don't like people keeping RVs when they are filing BK when my wife inquired about our motor home.
So be it.

[LuciluS]

So your mortgage payments are going up in November? Don't reaffirm that home. So beginning in November, you will no longer make mortgage payments?CA foreclosures are taking a long time. You can do a search or go to the foreclosure section & read some of the posts. You could probably live there for a year rent free. I'm sure the neighbors would appreciate it as you would keep the yard mowed, etc.

Don't know when you are planning on filing, but it needs to be probably no later than Aug. as the BK Courts are full & you need to be able to use your mortgage payment as an expense right? Another reason for filing soon: you will be asked at your 341 hearing if anything has changed in re to BK papers. You don't want to say I no longer make a mortgage payment.

I didn't see the Value (either kbb.com or nada.com) of your truck. Sounds like it's a heavy duty truck. People can tell you to quit making payments on it and save for another vehicle. Sometimes that's easier said than done as emergencies occur. You need to value the truck, look at your loan papers for interest rate & how many payments are left.

We traded in our Silverado 2500 4X4 for a 2004 Dodge Dakota with 4 doors, but short bed, in 3/06 as we no longer had a camper & gas was eating into our budget plus we were rear ended & the major impact was the 3 way ball hubby had on the truck. It started my downfall of 8 surgeries and deemed disabled now. Only did about $800 damage to the truck.

We had a motorhome which we voluntarily surrendered in 11/08. They sold it at an auction & we will include the deficiency of the $14,500 in our BK filing on 9/09. We simply could afford the payments and the insurance on it.

You can continue to make payments on the truck and your mortgage during Banrkuptcy. A Day or two before filing, call and ask for the Bankruptcy Dept. and get the mailing address as your payments will need to go there to keep current. If the truck is set up to be paid out of your account, the Credit Union must cease this activity once notified.

I worked for a credit union in Indiana. They are know for cross-collateral clauses in either the truck payment or your account agreement, which you probably didn't keep (I didn't). I would strongly urge you to find a Neutral Bank to set up a new account and have your paychecks direct deposited into the Neutral Bank. If you decide to keep the truck & reaffirm, you can move monies from the neutral bank to the CU if they go back to auto-debit.

I am strongly against auto-debits for mortgages, car loans, utilities and Credit Card Companies. Although many are urging such. Waste Management who picks up our garbage is going to charge $3.00 a quarter if you do not allow them to auto-debit & receive statement via Email. I've found it's very easy to forget to print the statement & one a month I clean up my emails & the statements are gone. I'll pay the $3.00. I have my Car Insurance, My Blue Cross/Medicare payment, DH's ParentPlus loan & our alarm system monthly bills auto-debit. Had no choice on any of them except the ParentPlus loan & received a 1/4 interest off for auto debit.

You can peruse this thread in the coming week and make your decision. Whatever you decide, I hope and pray your BK will give you and yours a Fresh Start.

Luci

[MNGurl]

Kenshirley,
We will not keep the Travel Trailer if our attorney advises us not to. Not a problem. We can always get another one. We'll see what they advise about the truck. Whatever they advise, we'll probably do what's best. Wouldn't be stubborn about anything like that. Not sure about a redemption loan though either....I appreciate everyone's advice. I thank you for taking the time to answer. :-)