Can I sell my car AFTER filing?

[gman]

I have a strange situation.

* I am unemployed, and there is no way to show positive projected income on my Schedule J.

* Because of this fact, many lawyers have told me that the court will not allow me to reaffirm the car loan debt.

* THE CAR ACTUALLY HAS EQUITY. I could dump it today at CarMax, pay off my loan, and pocket $2000

* The car equity is protected in my district ($3,000 exemption.)

* A lawyer has told me to expect that around 30 days after I file, the creditor will repossess the car (because it has equity - and because the debt will be discharged because I cannot reaffirm.)

* I'd like to keep the car and continue to make payments regardless of the situation. It is a trustworthy car and I will "own" it in 14 more payments. If there is no way to do this - then so be it.

QUESTION: Should I sell the car now - and buy a junker with the cash? I do not have a job so I would not qualify for a subprime loan currently.

QUESTION: Should I sell the car after filing? If so, when? If not, is there some legal reason why I cannot sell it after filing?

QUESTION: If I cannot sell the car at all - I am leaning towards not making any more payments because of the repo issue. Any problems with this? (I am current and not late on this loan.)

QUESTION: Am I missing anything?

Thanks in advance for chiming in.

[ironpirate]

I would wait wait till after your 341 meeting. I never heard of a creditor taking somebody's car thats current on a loan and I doubt the court will not reaffirm your only transportation.

[daylate]

I have read elsewhere and it makes sense (although logic and common sense seem to not always be important in bankruptcy proceedings) that as long as you continue to make payments the car will not be repossessed, whether you reaffirm or not. As in most cases, the lender doesn't want the car, they want the money. In other cases I have read about, the debtor contacted the car lender and in all but one I think the lenders said send the money, keep the car. Good luck.

[dspii]

If you file, you cannot sell the car until the trustee abandons the asset....everything becomes property of the estate and therefore cannot be transferred outside the courts. If you can continue to make ontime payments, with the intention of reaffirming, it is very likely that you will keep the car throughout your BK. If you sell it now and buy a cheaper car, the positive cash you gain from the sale has to be used for justifiable things, like food, utilities, medical and of the such. Bottom line, if you choose to sell, don't buy a new big screen or go on a vacation or pay off a cc that will be discharged.

Your lawyer should know the district, but you could always ask another lawyer their strategy in this situation. It suprises me that they could repossess your car if you are current on payments, merely based on there being exempted equity in the vehicle. I'm definately not a lawyer, but unless your loan agreement has some "bad" BK language in it, I would have never thought they cannot repossess it unless you default on the loan...now read your contract and their definition of default.

[justbroke]

In the 11th Circuit Court of Appeals, which includes Georgia, Alabama and Florida, caselaw shows that you must reaffirm, redeem or surrender a motor vehicle. There is no ride-through option. However, it's up to the lender to enforce these provisions. IN other words, if you mark on your Statement of Intentions that you are doing "Other" and don't select "redeem", "reaffirm", or "surrender", the lender "could" ask the court to force you to choose one. This has happened and continues to happen, but it's usually smaller banks that force people to choose.

As stated earlier, you'll just have to see which way the wind is blowing. You might be able to get a Judge to approve a reaffirmation given that you have positive equity. The judge will want to know how you plan to keep up the payments though.

[gman]

Spoke to my credit union

Even though I am unlikely to qualify for a reaffirmation, they tell me they won't repo as long as I am current which I am.

[justbroke]

Even though I am unlikely to qualify for a reaffirmation, they tell me they won't repo as long as I am current which I am.

That's actually pretty fair, for a credit union. You must not have any "cross-collateralized" accounts there.