Issue with 'giving back' a motorhome in a 7...need help

[AllMyFault]

I touched on this in another thread earlier;
My father in law lives in my 10 year old motorhome and pays me $600 a month. Their is no equity in it, in fact I am a little upside down on it. The problem is the transmission is out of it and the engine is probably blown. I got a quote for repair of almost $7500 which I can not afford. Will I even be able to give it back to the creditor with a blown engine and transmission? Will the court allow me to do that?

[daytona]

Sure you can give it back...they might not want it but the loan will be discharged in your Ch7 assuming you don't "reaffirm" it. So if you want it to go quit paying them, they either come get it or they don't, either way you don't have to pay for it anymore...OR they might offer you a price to "redeem", since it's creationg 600.00/mo it's probably worth "something" to you.

[AllMyFault]

Sure you can give it back...they might not want it but the loan will be discharged in your Ch7 assuming you don't "reaffirm" it. So if you want it to go quit paying them, they either come get it or they don't, either way you don't have to pay for it anymore...OR they might offer you a price to "redeem", since it's creationg 600.00/mo it's probably worth "something" to you.

Yes, it is definitely work something and I will try to redeem it at the right price but I just wasn't sure if the court would allow me to give something back in that condition. I don't even know if I can get the transmission back from the repair shop since I owe them for parts and labor on it. I may have to give back a motorhome with NO transmission.

[tcreegan]

Hello AllMyFault,

Thanks for using a separate thread for the motorhome and motorcycle!

I just wasn't sure if the court would allow me to give something back in that condition

It is not up to the court. It is up to the lender whether or not they want to collect their collateral, and given what you have, I seriously doubt they want it back. Keep making the payments and remember that the lender has restrictions on contacting you during a BK, so you have to contact them (say they quit sending statements and you still want to get them, online access may stop, you want to get it back)

What the trustee can do is sell it, take the equity and distribute it to your creditors...BUT, you said it is underwater so you have no equity.

You only need to worry about reporting Dads 'rent' and if you can use any expenses on your forms....BUT, according to what you have posted, neither of these will be a problem.

So, tell Dad he doesn't have to move out....

Tom in Colo

ps: be sure to list the mechanics as creditors

[despritfreya]

In response to:

"You only need to worry about reporting Dads 'rent'"

I have a problem with this. Rents are property of the estate especially if the rents are generated by a non-exempt asset. OP should not collect a dime until the Trustee abandons the asset. If OP collect rents he should put the $$ in a segregated bank account and not spend it. OP, if you are reading this discuss this with your attny. I cannot tell you how many debtors have hired my firm to do damage control over this issue.

Des.

[tcreegan]

good call despritfreya, I forgot about the rents going to the estate. I was thinking of Dad's rent as a 'household contribution' instead of really being rent. Guess I couldn't see my way to collecting rent from my Dad, I would think of it as a hand-out every month.....

Tom in Colo