Can we buy back the car?

[Wantmypeace]

So, I'm curious about buying back our car. We have a loan on it for 16K, and it blue books at about 8K (Yah, I KNOW!!) We were planning to give it up in the BK, and then turn around and buy another similar car for cash. (Currently saving the money to do this, and the money will be exempt because we have no assets and can use the CA wildcard to exempt the cash.) So, have I read correctly on some threads that the trustee could allow us to simply "buy back" the car at current market value? So, is there the option of giving the trustee 8K (or whatever he determines fair market value to be) and keeping the car free and clear? Anyone know anything about this?

[HHM]

What you are talking about is called 722 Redemption.

For secured loans that are NOT secured by real estate, (so, car loans), the BK code allows you to buy the item for the current market value of the vehicle. So in your case, if you owe $16K but the car is only worth $8k, then you can pay $8k to to buy out the vehicle.

On a technical note, it is not the trustee you will deal with, it is the car lender. So, there is some negotiation involved if the lender does not agree with your valuation.

[PushRestart]

Same question from me, a newbie, how does Ford Motor Credit determine the value of my car? I would like to do a redemption car loan to buy itfrom them butnot for the 25k I owe on the loan (it is worth maybe 15k?)

[tcreegan]

Hi PushRestart,

Most likely FMC uses a local appraiser or the Ford dealership. Call them up and ask. If you can't get a straight answer on the phone, stop by the dealership and check w/ the finance dept. (remember you don't want trade-in value, but 'dealer-buys-it' value)

FMC has a bit of a, shall we say 'tarnished' reputation here on the forum. You might get better results by posting a new thread along the lines of 'Anyone done a redemption loan with FMC?'

Good luck with this!

Tom in Colo

[PushRestart]

Thanks Tom, you are the best!