can I keep my car question

[anafan]

Hypothetical...

currently paying on a 2006 Malibu, current on my car note. when I file I Chap 7 BK, I will owe about $1200.00. it is worth between 6000 and 6500. it is in pretty fair condition, I'd say average, a few dings and a big scrape on the back bumper. but it runs great. I plan to continuing paying the note and I want to keep the car. I will have about 4 payments left the month I file. I am hoping to reafirm the car note to rebuild my credit as well.

the state exemption for autos in my state (Ohio) is $3750.00. also have wild card exemption available $1750, (which I don't think I need for household goods). can I combine those exemptions so I can keep the car? or is that even an issue if you are reaffirming?

what I don't understand is do I need to even use the auto exemption if I reaffirm the car note.

what does it mean to buy back the car if there is equity? if there is excess equity of $1000 or so, how do I give them the $1000.00? I will have my attorney's fees, the BK filing fee and that's about it. do I continue to make the car payments AND pay the equity in payments?

confused about the whole car thing. I want to keep this car. I live too far from my job to use public transportation. and I want to be debt free after the car note is paid off. so tired of the whole credit card game.

help!!

[Nicollette]

Hypothetical...

currently paying on a 2006 Malibu, current on my car note. when I file I Chap 7 BK, I will owe about $1200.00. it is worth between 6000 and 6500. it is in pretty fair condition, I'd say average, a few dings and a big scrape on the back bumper. but it runs great. I plan to continuing paying the note and I want to keep the car. I will have about 4 payments left the month I file. I am hoping to reafirm the car note to rebuild my credit as well.

the state exemption for autos in my state (Ohio) is $3750.00. also have wild card exemption available $1750, (which I don't think I need for household goods). can I combine those exemptions so I can keep the car? or is that even an issue if you are reaffirming?

what I don't understand is do I need to even use the auto exemption if I reaffirm the car note.

what does it mean to buy back the car if there is equity? if there is excess equity of $1000 or so, how do I give them the $1000.00? I will have my attorney's fees, the BK filing fee and that's about it. do I continue to make the car payments AND pay the equity in payments?

confused about the whole car thing. I want to keep this car. I live too far from my job to use public transportation. and I want to be debt free after the car note is paid off. so tired of the whole credit card game.

help!!

I could be wrong about the whole auto exemption thingy, but I was thinking that the auto exemption is only used if you own an auto free and clear, no lienholder.

[carlsbadmike]

The auto exemption is based on how much equity you have in the car.

Value(Private party Kelley Blue Book)
-(minus)loan amount
=Equity.

[tcreegan]

Hi anafan,

carlsbadmike has the right idea: 6000 car value minus 1200 loan balance = 4800 equity.

The trustee can take the car, sell it, and distribute the 4800 to your creditors.

BUT...the trustee can't sell what you have exempted.

So now it looks like this...6000 value minus 1200 owed on loan minus 5500 exemption (3750 vehicle + 1750 wildcard) = negative 700

The trustee can't sell it and make any $$ for the creditors (in fact they lose $$) = they won't come get it, you get to keep it.

Alternate scenario, lets say you didn't have the wild card:

6000 minus 1200 minus 3750 exemptions = 1050 So hypothetically the trustee could sell the car and distribute the 1050

But you want to keep the car, so you pay the 1050 to the trustee; essentially buying the car from the trustee.

In real life, the trustee sells the car at auction, gets a much lower price, has to pay towing, auction costs...so the car is worth 6000 but the trustee ends up w/ 4000 Bottom line; the trustee won't go after a car unless there is a good amount of equity.

Lots of blather, but it looks like you can keep the car...

Tom in Colo

[anafan]

If you have to go by the Kelly Blue Book Private Party Value, I'm screwed. right now that's about 10k. I owe 7k on it. but I tried to trade it in about 6 months ago and the dealership would only give me about 5.5k for it. they told me since I had traded another car in and rolled it into the note (and I also purchased the extended warrantee, tacked into the note) I was underwater. they were willing to buy the car back and sell me another, but I didnt want to start a note all over again. it ended up that I wouldn't even have saved much per month on the note so I didnt trade it in. so, how can that be that the value of it is 10k?

I can't file BK yet because of a balance transfer I did recently. I have to put at least 9 months of time in first.

if I wait until Jan 2012 to file, I'll have 9 months worth of payments. so I'll owe 2929.00 when I file. how do I figure out how much it will depreciate in a year? and do I figure all this out from the point that I file BK? or go to the first meeting of the creditors? it will be paid off in Sept 2012, my note is 325.00 per month.

now I'm even more confused.

I don't care about losing my tax return. it won't be much anyway. but I have to keep my car.

I'm have tempted to just wait until it depreciates to where it's only worth the exemption. but I'd probablly be getting sued by my creditors by then. I don't think I can keep this going that long.

how can a car's Kelly blue book private party value be so high? no one would give me 10,000 for this car. you can buy a 2009 Malibu for 9k!

[keepinitreal]

If you have to go by the Kelly Blue Book Private Party Value, I'm screwed. right now that's about 10k. I owe 7k on it.

If you can have a $3750 exemption and you only have $3000 equity in the car at the most, I don't see how you're screwed.

[anafan]

If you can have a $3750 exemption and you only have $3000 equity in the car at the most, I don't see how you're screwed.

I can't file BK yet, I have to wait because I did a balance transfer for cash. I can't file for at least 9 months. that's why.

and from what point do I figure this all out...the day I file BK, or go to the first creditor's meeting?

how much does a car depreciate in a year?

[newbie2]

No idea how much your car will depreciate within a year. Makes and models vary, some hold their values well, others not so much :-) You will have to know your cars value (and the amount you can exempt) when you file. You will want to exempt what you can in your filing. What you can do however is when it is close to filing take your car to several different dealers and ask for a written opinion of value. Sometimes those hold more weight because professionals have seen your car and given an opinion.

[anafan]

how is it they go by Kelly BB private value anyway? no one would give me 10k for this car. the dealership would only give me 5.5 on a trade in. Edmonds has it at 6k.

should I get it appraised? will the trustee look at an appraiser's value?

[newbie2]

how is it they go by Kelly BB private value anyway? no one would give me 10k for this car. the dealership would only give me 5.5 on a trade in. Edmonds has it at 6k.

should I get it appraised? will the trustee look at an appraiser's value?

Read my reply above this one.

[anafan]

I financed the car in 2007, paid $15,000, I rolled another note into it (because the engine was going in that car and the warrantee had expired), I also added the extended warrantee to the note (which expires Jan 2012), it had 15,000 miles on it.

when I bought it, everyone I talked to thought I paid too much for it. yet, somehow, 3 years later. 35,000 more miles later it's still worth 10k? A Chevy Malibu?? really?? I love my car but even I know that's a bunch of hooey! plus if I file, there will be an additional year of depreciation and miles put on the car. I live in Ohio, another year of Ohio winter!

it's a 2006 Malibu LT, 6 cyl. it's still pretty clean, has a scrape on the right rear bumper, hit by a hit/skip. its dinged in and scraped the paint off the bumper. One of the rims is bent, another documented accident with someone who had no insurance. the rim is bent and the wheel wall has a ding in it. It now has about 47k miles on it. I live near the auto mile, I've seen my make and model on car lots for $9,000, but if I try to trade in at any of those lots there's no way they're giving me $9,000, for my car.

I know because I already tried. the way the dealer worked it, I was going to only save $30 a month and I would have had to take on a 6 year note...whereas the note I am in is a 5 year note. AND I was already 2 and 1/2 years into the note at that point. I said forget it and drove right out of there!

previously, I was figuring on filing BK May of 2012. I'd still owe $1,300.00 on my car note. I wanted to reaffirm my note so I can start to rebuild my credit. I figured I'd have no problem paying the note for 4 months. I was figuring this because I was under the mistaken assumption that if you reaffirmed a car note you didn't need to use the exemption to protect your car.

so now, change of plan, and I'm thinking I can file sooner, (Jan 2012) I'll just forfeit my tax return. I'll just change my deductions prior so there won't be much of a return in 2012 anyway. so if I file earlier, say Jan 2012, I can reaffirm my note then right? I'd still owe $2600 on it when I file. if I can document that my car is only worth about $6675 (what I owe plus the Ohio auto and wild card exemptions) at that time, which should'nt be too difficult since I'll still be putting miles on it between now and then, will they still go by Kelly's BB Private Sale value?

(what I mean by document is, I will go to dealers and get them to appraise it like I am trading it in. any other suggestions how to document the car's value besides the Kelly BB Private Sale value, which I believe is jacked up?)

it makes no sense to go by that value. no one would pay that much for that car. the trustee wouldn't get $10k for this car if they were selling it today.

also there would still be a lien on my car for the balance of the loan. I mean, why do that anyway? if the trustee does take it and sell it, don't they have to pay the lien holder first and give me my $3250 exemption on top of that? if so, that totals between $5050 and $6410 depending on when I file BK. so possibly they net $1000 to $2500 max (if they get the full amount Kelly's BB value) to distribute to the rest of my creditors? that money will just fall in a giant hole of my debt. it makes no sense to go thru all of that. when they could just let me reaffirm, let the bank get their money in full. the other's get nothing since it is all unsecured debt anyway. the car note is the only secured debt I have.

do they go by the value of the car on the day you file BK? or when you go before a trustee? or the meeting of the creditors? at what point do they negotiate all of this?

and if anyone is concerned, as soon as this became a concrete plan, I stopped using my credit cards, except for food and I caught up my utilities. I've cut them up, and I won't use them again. but I did do a balance transfer check a month prior...that's why the delay in filing. I will keep all my credit cards paid and current in the meantime.

I'm sorry if this post seems like rambling. I have a million questions about one car! LOL! thanks everyone for your replies and your support! I love this board. you guys are great!

[newbie2]

I understand your concerns, but please know only you can make a decision about your car. Seeing 9 months to a year in to the future and trying to determine the value of it is difficult. One thing you overlooked when reading all the replies: Even if you have equity that you can't exempt you can buy that back from the trustee. Example: If there is $1000 more in equity than you are allowed, you pay the trustee $1000. Many times this can be done on a payment plan with the trustee.

As I stated before, if you are still believing that blue book value is too high for your car, take it to a couple of dealers for written quotes on value before you file. Your attorney will also be able to guide you as to what the trustee normally uses to not argue value.

[anafan]

I understand your concerns, but please know only you can make a decision about your car. Seeing 9 months to a year in to the future and trying to determine the value of it is difficult. One thing you overlooked when reading all the replies: Even if you have equity that you can't exempt you can buy that back from the trustee. Example: If there is $1000 more in equity than you are allowed, you pay the trustee $1000. Many times this can be done on a payment plan with the trustee.

As I stated before, if you are still believing that blue book value is too high for your car, take it to a couple of dealers for written quotes on value before you file. Your attorney will also be able to guide you as to what the trustee normally uses to not argue value.

WOW! so that I didn't know. I can make a payment plan for the equity? now I could do that. so now I'm not so scared. thanks alot newbie2.

you just made my day. that's what I asked in the first posting...do I have to come up with the cash for the equity right on the spot.

I've already had it appraised before. they said $5500.00 and that was a year ago. that's why I think the $10k Kelly's has is way too high.

thanks!!

[Chowder]

WOW! so that I didn't know. I can make a payment plan for the equity? now I could do that. so now I'm not so scared. thanks alot newbie2.

you just made my day. that's what I asked in the first posting...do I have to come up with the cash for the equity right on the spot.

I've already had it appraised before. they said $5500.00 and that was a year ago. that's why I think the $10k Kelly's has is way too high.

thanks!!

Remember. Everything depends on the Trustee. EVERYTHING. And I'd add it helps immensely if your Attorney has a favorable rep or rapport with the Trustee(s).
That said. I lowballed, and I mean lowballed, to exempted amount, a car with a Kelly BB of $12k(ish) that I owned outright. It was never questioned.

[anafan]

Remember. Everything depends on the Trustee. EVERYTHING. And I'd add it helps immensely if your Attorney has a favorable rep or rapport with the Trustee(s).
That said. I lowballed, and I mean lowballed, to exempted amount, a car with a Kelly BB of $12k(ish) that I owned outright. It was never questioned.

I already know what attorney I am going to. the same one my ex used. I went to his meeting of the creditors due to the fact that we only had one car. the attorney had a real good rapport with the trustees...everybody knew him at the courthouse, all he does is BKs. they were all joking around with him. he knows what he's doing.

so you lowballed them and kept the car outright?

I guess that was another reason for posting. I was hoping others would chime in with their experiences. I tried to search on this board and didn't get much in the way of helpful responses.

thanks for your imput