Question about surrendering a car

[anmartin31]

We only have one car, the payment is $656 a month and its a gas guzzler. We want to pay for it up until we file which will be around Oct 1st as we need the expense for CH7, then we will not reaffirm the car loan. Will the car company take the vehicle while the bankruptcy is ongoing or do they repo it after you are discharged. My FIL is loaning us one of his cars (free of charge) once the truck is taken back, will this be frowned upon by the trustee or our attorney. We just cannot afford a car payment.
TIA

[liz417]

It depends on your loan company. In your petition it will ask you what your "intentions" are regarding the vehicle, at that point if you say that you are letting it go, you have that extra $656 per month to fund a ch 13, but if you say you are going to keep it and/or intend to do a "ride-through" (and give it up later), I don't think the Trustee will let you use such a high payment in your petition. What State are you in? Do you know your car allowence for your district?

[anmartin31]

I am in Washington state, I believe the allowance is $456 a month per car and the attorney said we would be okay with our $656 payment as we only have one car. Do you know if a ride thru is allowed in Washington, that may be our best option. We are well below the median income level as I am not working and my husbands income is $37000 a year for a family of 4. If we say on the petition that our intentions are to surrender the car, can we still use gas expenses for the borrowed car that my husband needs to get to work every day?

[Chowder]

No ride-throughs in Wa. And they cannot repo the car during the BK process unless they file a 'relief of stay'. You will have an opportunity to respond to the filing, if you choose to. If or when the Judge grants the relief, the lender then can proceed with repo action.

In Wa state, they cannot enter a locked gate or move one vehicle to gain access to the target car. They also cannot enter a closed private structure unless invited.

On the other hand, the few repo guys I've had misfortune to deal with, do not play by the rules.

[StartingOver08]

I think your best option is to do what you originally had planned: keep making the payments up until filing and then surrender the car in BK. If you need the payment to qualify for the Ch 7 BK, you can start out with the intent to reaffirm. You can then attempt to negotiate with the lender on the reaffirmation agreement. Some will neogtiate others won't. If your lender won't, just change your statement of intentions to surrender and file it prior to discharge. This is a perfectly legitimate strategy. That way you keep your Ch 7 and get rid of the high payment.

[LSUTiger32]

If your household income is $37,000 with a family of four how can you need the car to file CH7? You should not be anywhere near the median income for a family of 4, huh?

[OhioFiler]

If your household income is $37,000 with a family of four how can you need the car to file CH7? You should not be anywhere near the median income for a family of 4, huh?

If their Schedules I and J show disposable income they can still be forced into a Chapter 13 regardless of their income. The median income test is only used to determine whether the presumption of abuse arises.

[anmartin31]

My attorney says that we need the expense to file CH7. We are struggling to make the payments every month, I wish we could just surrender now but I guess thats not an option.