Filing Chapter 7 on 3-2-2011

[secondchance]

I am going to be filing Chapter 7 on 3-2-2011 I have a car loan from Navy Federal Credit Union I haven't paid on it in 2 years due to unemployment and various other situations which lead me to where I am today. Anyways I just got a job a few months ago and I still have the car I'm worried be about whether they are going to come and get it before the discharge? the car is in horrible condition and most of the repairs are more than what I owe...I owe $3800 on the car... I just need it until my discharge and I can try and get a better car after a few more months on my job...Does anyone know whether they will come and get it before then? If so about how long do I have before discharge?

[Looking2Help]

I wish I had an answer for you, but I have zero experience with your situation. However, if memory serves me correct I have read a post by someone else where the author spoke about needing repair work done due to a major collision and the cost to repair was greater than the value of the car. Example - he/she owed $3800 and the cost to repair was $4100. I don't know the outcome (I did not subscribe to the post and can no longer find it) but am certain that if it can be found it may help answer your question, i.e. did the bank actually collect the wrecked car? Perhaps someone else recalls, but if not, I'll bet someone chimes in with the answer for you this weekend.
If I had to guess: You will be fine because you owe such a small amount and the blue book or resale value may not be worth their effort to take it back - but that is just a guess. Good luck.

[tcreegan]

Hi secondchance,

To tell you the truth, if you haven't been paying for 2 years, I can't see why they haven't come to get the car already.

The BK filing will buy you some time. Once you file, the "automatic stay" goes in effect and they can't come get the car until they file a "motion for relief of stay" In normal circumstances this gets you a couple months or so. This scenario runs independently of the discharge, they aren't coming after you for $, they are just taking back their collateral for the loan. (The other time factor is your state repo rules, after the "motion for relief" they still have to follow the state laws, might be a waiting period in there)

But from what you said about the car, they may not want it back.......you have been in default for awhile, only owe $3800, it needs twice that in repairs, horrible condition ...hmmm, might not be worth the towing charge...

Being that you are with a credit union, be aware that many credit unions have a "cross-collateral" clause. If you have a checking/savings account with the credit union, they freeze your checking/savings acct then take the $ to pay the car loan. Not all credit unions do this, check w/ FNCU to see what they do, and if you don't have any other accounts at NFCU then it doesn't matter.

Good luck with this,

Tom in Colo