Car dilema

[wishitnotso]

Ok...we filed last week BK7 and met the means test. I have two cars with the same credit union. I am one month behind on one car and two months behind on the second. I am even on one and about $6k upside down on the other. My lawyer says give both up, but I am out of work, looking hard and don't have funds to run out and buy even a cheap car.

The big question is this. Will the credit union repo my two cars now since I have filed BK7 and am behind? I am hoping I have a couple months to get a job and either get caught up and reaffirm or chose to dump them and buy something else.

If they repo them soon, I will be in a big fix.

Anybody have a suggestion?

[nerves]

You should have the automatic stay until at least your 341 meeting. I think the stay is for 60 days after filing but I am not 100%. Hopefully another will chime in.

[wishitnotso]

My lawyer did not explain it very good, but does an automatic stay put everything on hold until the 341 mtg? That way the CU could not take the cars until after that point?

[aces67]

They can file a motion to lift the automatic stay and if it gets lifted then they can repo the cars. It would still take them several weeks to get this done though.

[AngelinaCat]

To help clarify: the Automatic Stay runs from the date you file, until your Discharge. Discharge *usually* comes 60 days after your 341 meeting, or depending on your circumstances--whether you are an Asset case or not--and the backlogged workload of the court itself, which could be a few more to a hundred more days after you file.

When a creditor wants to reposses a car or foreclose on a home, they have to file a Motion to the Court, requesting that the curtain of the Automatic Stay be lifted for them--no one else. If the judge grants the motion, then the creditor can proceed with repossession or foreclosure proceedings. Otherwise, they are not allowed to contact you or take any other action while you are in the BK process.

On the two autos: could you possibly make arrangements with the CU to return one car, then concentrate your payments on the other--bringing it up to date? Or is it an 'all or nothing' deal?

[wishitnotso]

According to my atty, CU's cross collateralize and if I gave one car back I would have to pay the amount I am upside down on that one before they would ever release the title to the one I kept. Therefore you really ad that upside down debt to the car you keep. That makes me want to keep both or give up both. Neither option is easy, but who ever said BK would be easy. Huh

[StartingOver08]

Yes, CU's cross collateralize. HOWEVER, you can negotiate with the CU to remove the cross-collateralization on one of your vehicles if you decide to keep it. Not all CU's will remove it, but you can work directly with the BK dept to see if your CU will remove it. If so, have them put it in writing (they do when they put together the reaffirmation agreement). I know it can be done because I did it with my CU on a car loan (and I surrendered my house where they had a 2nd mtg and BK'ed a VISA in the amount of about $23k). If they won't work with you then you can give up both vehicles like you originally planned.

[MSbklawyer]

According to my atty, CU's cross collateralize . . .

He's right. Every item of collateral is security for every loan and every loan is secured by every item of collateral.

Good luck in the job search.

[wishitnotso]

Another thing I am facing on my BK7 is the lack of income. If I go to my 341 mtg and still have no job I assume my chances of reaffirming the cars is shot anyway. Then I am faced with losing my house I guess. Will the trustee allow me to keep the house if I can't show legit income by my 341 coming up Nov. 24th? I am current as of now, but can't make my mortgage payment which is due today. Likely, I will be one month delinquent on my home and 2+ mths late on the cars at the 341.

Any thoughts on what might happen in the eyes of the trustee?