Question about keeping Auto in MI

[Rob517]

I have been notified I am eligible for Chapter 7 which came as a surprise to me. With that being said, I have a loan for a vehicle I purchased last year. I would like to keep that vehicle and continue paying it off. It has no equity, in fact its worth a few thousand less than the amount I am paying on since I had roll over some cash from the old loan.

I have been doing some reading and I see MI allows the Federal Exemptions if I so choose for for my BK which states you can exempt $3225.00. I assume that would be the amount of equity allowed in my vehicle. Since my vehicle has no equity, can I automatically reaffirm the loan and keep it? Does the trustee have the right to say "no" and take my vehicle, or can the loan company say "no" as well to the reaffirmation? I only have one vehicle.

Thanks for the help.

[lrprn]

Since my vehicle has no equity, can I automatically reaffirm the loan and keep it?

No. You may want to have the reaffirmation, but your lender is not required to accept it.

Does the trustee have the right to say "no" and take my vehicle?

If your car's current market value minus loan value is completely protected by your state's auto exemption, then your car cannot be seized by the trustee.

...can the loan company say "no" as well to the reaffirmation?

Yes, your auto loan lender can refuse to sign the reaffirmation. Reaffirmations are voluntary for you and for the lender.

[Intoodeep80]

I dont want to lead you with false hope but...

I surrendered my vehicle in my chapter 7 bk, Im also in Michigan.

After I was discharged (owed $14k on a SUV worth $5k), the bank came to repo the truck but asked me to make an offer first. I offered $2k for it and they accepted

Im not saying you will be able to keep your vehicle, I think I was very lucky and thank the bankruptcy gods every day...lol... but if you dont re-affirm, that may be your only hope. I did not re-affirm and had full intentions of surrendering my Envoy and driving a clunker for a few years. It worked out good for me, I paid the bank and got my lien release a few days later. I cant say it will work the same for you but Im sending all good vibes your way!

[Rob517]

I dont want to lead you with false hope but...

I surrendered my vehicle in my chapter 7 bk, Im also in Michigan.

After I was discharged (owed $14k on a SUV worth $5k), the bank came to repo the truck but asked me to make an offer first. I offered $2k for it and they accepted

Im not saying you will be able to keep your vehicle, I think I was very lucky and thank the bankruptcy gods every day...lol... but if you dont re-affirm, that may be your only hope. I did not re-affirm and had full intentions of surrendering my Envoy and driving a clunker for a few years. It worked out good for me, I paid the bank and got my lien release a few days later. I cant say it will work the same for you but Im sending all good vibes your way!

I will take the good vibes and "pay it forward"... I actually want to keep my car if at all possible. Its only a year old and since I drive 44 miles to work each way, I really need something dependable. But if that is not an option or they don't accept the re-affirmation, then I guess I will go from there.

Thanks to both of you who have replied.

Rob