Vehicle Options

[daxtell]

i researched many local car dealerships where i live in a major metrolpolitan area and asked lots of questions. and none of them would even consider talking about a loan until my chapter 7 was discharged. or they asked for a letter from my attorney stating i was allowed to enter into a new loan agreement while in an active bankruptcy which of course my attorney would not do that.

[justbroke]

So, I am going to tell the lender to "eat steel". We were able to get a 2008 van with 29,000 miles and payment is nearly $200 less a month and it has a 3 year warranty! Thats what they get for not working with us.

You do not need to change your Statement of intentions; at least I don't think you need to. That was your intention at filing. Now you just tell them to come and get their pile of steel and enjoy that loss. LOL

I am most happy to read this news. I hope that you are happy with your new car and lower payment!!!

[LadyinAL]

Hey guys,

I am new here but I have been researching for awhile. I filed Pro Se Ch 7 BK on Monday. I was interested in the 722 redemption program, do I need an attorney to apply or is there any lenders that will work with me w/o a lawyer. Best to luck to you all. Thanks for sharing your experiences I know it has helped me out a great deal.

[justbroke]

Hey guys,

I am new here but I have been researching for awhile. I filed Pro Se Ch 7 BK on Monday. I was interested in the 722 redemption program, do I need an attorney to apply or is there any lenders that will work with me w/o a lawyer. Best to luck to you all. Thanks for sharing your experiences I know it has helped me out a great deal.

You absolutely do not need to have an attorney for a Redemption. However, you need to know the process (procedure) from the standpoint of the Federal Rules of Bankruptcy (FRBP) and your local rules. Your District may have a "template" Redemption Motion (Motion to Redeem). Otherwise, you'll have to pen a Motion to Redeem yourself, seeking court's permission to value and then Redeem the collateral.

You should start calling 722 Redemption RIGHT NOW. You don't have to wait for your case to file. They will pre-approve and then wait for the Redemption order to be signed by the Judge. Once that's done, you fax them the Redemption order and they set up your new account. Realize, that your interest rate will be high, but you should be able to "redeem" your existing vehicle for a lot less than you owe. I redeemed a vehicle that had a loan balance of $22K, for just $9K! (It was originally a $44K vehicle when I purchased it. Yes, I'll never buy such a vehicle again... total waste of money.)

[LadyinAL]

You absolutely do not need to have an attorney for a Redemption. However, you need to know the process (procedure) from the standpoint of the Federal Rules of Bankruptcy (FRBP) and your local rules. Your District may have a "template" Redemption Motion (Motion to Redeem). Otherwise, you'll have to pen a Motion to Redeem yourself, seeking court's permission to value and then Redeem the collateral.

You should start calling 722 Redemption RIGHT NOW. You don't have to wait for your case to file. They will pre-approve and then wait for the Redemption order to be signed by the Judge. Once that's done, you fax them the Redemption order and they set up your new account. Realize, that your interest rate will be high, but you should be able to "redeem" your existing vehicle for a lot less than you owe. I redeemed a vehicle that had a loan balance of $22K, for just $9K! (It was originally a $44K vehicle when I purchased it. Yes, I'll never buy such a vehicle again... total waste of money.)

Thank you for that information. Just a note I did file to reaffirm with my current lender but was misinfomed that I could reaffirm with them because they thought I had a lawyer and I was just asking general questions at the time about their handling of BK cases. When I did actually call in to let them know I filed and that's when I was informed that they don't reaffirm with pro se filers, that I could keep making payments and no adverse action will be taken. I am current on my loan but I am $4,000 upside down on it. Do I need to ammend my SOI form now?

[justbroke]

Do I need to ammend my SOI form now?

You do not need to amend. You just file a Motion to Redeem the vehicle. Make sure you start this process NOW. You need to have a hearing on the Redemption, or file a stipulated order agreeing to the valuation with the current lender.

Please be aware that you still need to work the numbers! Make sure you amortize the new (redemption) loan at the new APR rate and consider the term to be what's left on your existing loan. In other words, if you have 24 months left of a 60 month 5.9% loan , don't check the numbers by comparing it to a 24% 60 month loan; you need to compare it to a 24 month loan. Remember, you would only "pay" market value for the car. I just want to make sure that you're saving money on the deal and that you do the right thing financially.

[LadyinAL]

JustBroke, thanks. I contacted 722 Redemption via US Bank today. They valued my car around the amount of my loan. My payments would be higher than my current one if I redeem. The lady said the value is based on what the court set forth which she said it market value not the trade in value that I quoted from KBB. I'm not sure if that makes sense. My car is 2007 Impala w/ 93,000 miles in good condition. she quoted it as $11,425 as the vaule. I valued it at $8950 via KBB. My current loan is $12,000. I'm kinda confused now lol.

[LadyInTheRed]

JustBroke, thanks. I contacted 722 Redemption via US Bank today. They valued my car around the amount of my loan. My payments would be higher than my current one if I redeem. The lady said the value is based on what the court set forth which she said it market value not the trade in value that I quoted from KBB. I'm not sure if that makes sense. My car is 2007 Impala w/ 93,000 miles in good condition. she quoted it as $11,425 as the vaule. I valued it at $8950 via KBB. My current loan is $12,000. I'm kinda confused now lol.

Trade-in value is not a good indication of market value. KBB private party value is probably a better source. The lender may argue that dealer resale value is more appropriate. As the lady told you, the court would make the final decision.

[justbroke]

For redemption the value is trade-in value. It is arguable that if the lender were to "eat steel" then they'd get the auction value, which is typically at or near "trade-in" value. It is up to the COURT to determine value and for the Debtor and Creditor to provide strong evidence as to the Value. When you submit your motion to redeem, you would show the KBB printouts, as well as any reports from a licensed mechanic (notarized and ready to testify if necessary) of the mechanical defects and current condition.

Please know that many of these creditors will try to use "clean retail" for the value, when it is most certainly should be "rough trade-in". Most courts in the 11th Circuit (Alabama, Florida, Georgia), take the view that the "trade-in" value is a starting point. Then you can take into account mileage, options, damage, condition, etc.

If the Redemption value is too high and the payments end up being more, then you may not want to redeem, but reaffirm.

[LadyinAL]

If the Redemption value is too high and the payments end up being more, then you may not want to redeem, but reaffirm.

It seems that I may have to reaffirm. All the quotes were stated to me were more than my current loan.

[justbroke]

I will only look past reaffirmation if the payments are relatively low, you have few months left on the payments (24 or less) and you have a decent interest rate (certainly less than the 24% that 722Redemption may charge). You indicated that you were $4K upside down but it may have been closer to $2K based on how the valuation was done. Just something to think about before reaffirming.

If the lender will let you ride through... then don't reaffirm! Who is the lender?

[LadyinAL]

If the lender will let you ride through... then don't reaffirm! Who is the lender?

The lender is PSECU, I did ask about reaffirming but they do not reaffirm with pro se filers. However, they did say if I continue to make payments then I can ride through. I am current and never been late. My interest rate is 6%, my payment is $252.00/mo. I just don't want to make payments and they still want to take the car after discharge.

[justbroke]

The lender is PSECU, I did ask about reaffirming but they do not reaffirm with pro se filers. However, they did say if I continue to make payments then I can ride through. I am current and never been late. My interest rate is 6%, my payment is $252.00/mo. I just don't want to make payments and they still want to take the car after discharge.

A credit union that allows a ride through? I'd get it in writing since they don't want a reaffirmation solely on the grounds that you are a pro se filer. If you can do that, it may be a "good" financial decision to just "ride through".

[LadyinAL]

I agree, it would be a "good" financial decision. I will contact them about getting something in writing. I did read on another forum, that someone was able to "ride through" with this same CU during and after their bankruptcy. Not alot information on this particular CU. If things change I'll update. Thanks for your help.

I hope the OP was able to resolve their issue as well.