I want to re-negotiate my auto loan

[BoomerSooner]

I surrendered one of my two cars financed with USAA. (I'm not yet discharged, I surrendered it voluntarily.)

The other car, I plan on keeping.

In order to reaffirm, I would like to request a loan modification. This vehicle was refinanced with USAA. I did not realize at the time that the amount of the loan that USAA gave me was substantially MORE than what the car could sell for today. Therefore, I would like to request a reduction in principal. In addition, the current interest rate is very high at 12%. I would like to request an interest rate decrease to 6%.

Car info:

2006 Scion xA, 85,000 miles

NADA Clean Retail - $8975.00
KBB Private Party "good" condition - $6600
Edmunds TMV (True Market Value). This is an estimate of what a car like this is selling for in the Oklahoma City area - $7398.00

Average of the three: $7657.00 (rounded to the nearest dollar). I would like to request that the principal be reduced to this amount, in addition to changing the interest rate BACK to 6% fixed, for the life of the loan. The amount owed on the loan is $10,300 or so. First of all, is this a reasonable request on my part? Second, how do I go about requesting this sort of modification? Does it have to go through my attorney? I'm ready and willing to surrender the car if they won't work with me. Any advice is appreciated.

[JRScott]

You might see what sort of redemption or reaffirmation agreement they offer, sometimes the do lower amounts and adjust interest rates.

Yes I'd go through your attorney see if he thinks you can do it. If you don't get an offer similar to what you want I'd not reaffirm but be a bit flexible.

[BoomerSooner]

excellent, thanks for the response. getting a response from my attorney has been near impossible since the 341. I'm so frustrated with him.

[HHM]

You can "try" this, but honestly, do not hold out too much hope. Car lenders rarely do anything to modify the terms of the loan.

Losses are part of the overall portfolio for a car lender. So long as the total losses are within the accepted range, they don't have an incentive to change your terms. They especially don't reduce principal. For car lenders, the issue is cash flow; if you are going to be a loss anyway, it is better for them to liquidate the loan and get as much money NOW as possible from selling the vehicle than rewriting the loan. It has to do with time value of money, money NOW is more valuable than money over time.

[aces67]

9 times out of 10 you either reaffirm for the original terms or you don't. Auto lenders usually are not interesting in offering you a modification.

[StartingOver08]

Your lender may or may not modify the loan. I had two cars at the time of filing. Tried to negotiate with each of the lenders, and one was willing and the other did not negotiate a penny. So, for the one that I was able to change the loan terms, reduce the monthly payment, skip a payment, remove cross collateralization etc. I signed a reaffirmation with them. It has since been repaid and I received the title promptly after the last payment.

For the other lender I surrendered the car because they would not work with me.

You do not know which lenders will work with you until you call the BK dept of the lender that holds your car loan. In my case the CU was the reasonable one and the small bank was not reasonable. Call them, work it out. If they won't you have your answer.

[JRScott]

Okay given your post in the other thread about your lawyer I think like Starting says you'll need to call up the bank yourself rather than relying on the lawyer and see what sort of deal they might be willing to work out with you. Some will work with you but as pointed out on cars many will not. Still it might work.

If they aren't willing to renegotiate with you then you'll probably need to surrender it.

[LimpDisc]

You have nothing to lose by trying.

We will be in the same boat as you with one of our vehicles. It's upside down by $6k+ and financed with Capital One. We will ask them to modify the loan or pick up the car. I have no idea what they will do, but either way they lose $6k or more on the car.

[albacore44]

i have a 2005 chevy Avalanche i owe GMAC about 9K on. 2 more years of payments at $370 a month. i indicated on my filing that i would keep, and pay through. I wanted the payment, to make sure I qualify for a Ch-7. but i have been considering giving it up after Discharge. it has some minor body damage, about 90K miles, and could use some work on the interior. I considered offering GMAC $4K cash to by out the loan. Not sure what it would fetch at an auction, but i suspect not much more than that, mabee less. HHM is right, in this economy, cash is king.

[BoomerSooner]

maybe I'll offer them $5k cash. They won't get more than that at auction, I'm sure.

[CJRUBIO29]

I surrendered one of my two cars financed with USAA. (I'm not yet discharged, I surrendered it voluntarily.)

The other car, I plan on keeping.

In order to reaffirm, I would like to request a loan modification. This vehicle was refinanced with USAA. I did not realize at the time that the amount of the loan that USAA gave me was substantially MORE than what the car could sell for today. Therefore, I would like to request a reduction in principal. In addition, the current interest rate is very high at 12%. I would like to request an interest rate decrease to 6%.

Car info:

2006 Scion xA, 85,000 miles

NADA Clean Retail - $8975.00
KBB Private Party "good" condition - $6600
Edmunds TMV (True Market Value). This is an estimate of what a car like this is selling for in the Oklahoma City area - $7398.00

Average of the three: $7657.00 (rounded to the nearest dollar). I would like to request that the principal be reduced to this amount, in addition to changing the interest rate BACK to 6% fixed, for the life of the loan. The amount owed on the loan is $10,300 or so. First of all, is this a reasonable request on my part? Second, how do I go about requesting this sort of modification? Does it have to go through my attorney? I'm ready and willing to surrender the car if they won't work with me. Any advice is appreciated.

Hi, I am also planning on filing a Chapter 7 and I have two auto loans with USAA. I also want to keep one. Did USAA let you keep the car? Also did you have auto insurance with them if so did they let you keep the policy? By anychance did you have a Military Star Card also? Did you include the Star Card with the Chapter 7? I am planning on doing this also.
Thanks