My wife and I have a car loan with Ford Motor Credit and owe about $20K. We would like to slice off the approximately $4K negative equity via a redemption and get the payoff down to around the $16K we think the car is worth. Do I simply call up FMC and ask to speak with someone about a redemption of my car in my BK? Does anyone have any experience with car redemptions, good or bad? As always, power to the people of This Forum, you all Rock! :o)
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Filed Chapter 7 7/14/2011, 341 meeting 8/16/2011, discharged 10/19/2011! Note that my posts are not legal advice, so please do not sue me, I have enough problems already. -
You can call FMC and, if you get someone with half a brain, maybe you can work it out. But, in all honesty, you will most likely need to file a Motion to Redeem, properly notice it to FMC, wait 21 days plus 3 for "mailing" and hope FMC fails to respond. If no response you can then request that the Court enter an Order approving the Motion. Once the Order is signed you will need to cut a check for the redemption amount. The problem you face is that the clock is ticking as to the lifting of the stay. If you do not act quickly you will be out of luck as FMC will repo before you have a chance to redeem, especially if your Statement of Intention said something other than redemption.
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File a motion to redeem. You need to mail this Attention: CEO or Officer of the company with certificate of service. The standard is Kelly Blue Book Retail Value minus the cost of any repairs, damage and excessive miles. When I redeemed my truck I took it to the dealer and got prices for everything from door ding repairs, tires, shocks, brakes, belts hoses, interior detailing etc. I then took the KBB retail value and subtracted the Retail cost of these repairs and that was the offer I made. I filed a motion to redeem and on the last day Toyota responded. After a lot of back and forth between their attorney we settled for less than 1/2 the loan value. More than my number but less than theirs. It is very expensive for them to go to court and fight redemption and the courts are not very creditor friendly and they know this. Remember the BK laws were written to give you a fresh start not to preserve a profit margin for Ford and most courts recognize this. Send me a private message with your email and I will be happy to send you the motions I filed.Comment
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If you fle a motion to redeem, do you need a lump sum amount to give to the bank(creditor). Will this money be considered as an asset by the court since they might say you have that amount of money on hand?Comment
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Redemption requires a lump sum payment unless the lender agrees otherwise. No, the funds acquired after you filedto pay the lump sum will not be an asset of the estate unless the source is from an inheritance or a property settlement you became entitled to within 6 months after filing.Originally posted by primrose View Post
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IT depends on where the money came from. If you had the money before you filed then it should have been listed as part of your exemptions and you are simply exchanging the exempted money for exempted vehicle value. I had 2000$ in savings that was listed as exempt in my schedules that I used to redeem my vehicle. If you acquired the money after you filed then it is not an asset of the estate. You can also obtain a 721 loan for redemption from lenders and this of course is a loan and not an asset.Comment
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Ok i get it now. What if I filed and then my family help me out to pay the redemption value of the car, will that be ok? and should I first tell the trustee and get an approval? of course i need to repay my relatives so will that be an issue at all.Comment
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Actually, I don't think you quite get it. If the funds you use to pay the redemption are from some source after you filed - family, friends, loan, wages, lottery ticket purchased after filing, etc. (other than the 2 exceptions I mentioned) - no one "cares". The funds are not an asset and the Trustee has no interest in your efforts to redeem.Originally posted by primrose View Post
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I agree with the above post. The assets you have the day you file bankruptcy are what count. You can win the lottery the day after you file and you can keep that money as it was post-filing. There are only a few exceptions listed above that count after filing. It is like that guy who just won 2 million dollars in the lottery and he is still receiving food stamps. It is completely legal and the state can do nothing about it because the eligibility period is the year prior to filing so in one year he will be ineligible but he can still collect food stamps for that year. Bankruptcy looks at your estate the day you file and before not after.Comment
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so nice of you guys to help out. sorry for being clueless. we are filing this month and if ever the car lender refuse to accept the current retail value of the car as the amount of redemption should we still go ahead and file for the motion to redeem or just give up the car at that point. its a nice car and we need at least one. i'm afraid they gonna take the car right away after filing. no lawyer just filing on our own so i'm trying to get as much info as i can. car is still good and just worth 4k in kbb but needs some 100k maintenace and replacement parts like timing belt etc.Comment
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My lender (Toyota Motor Credit) refused to negotiate. I owed 4K on my car. The Kelly Blue Book value was 6k but you get to deduct all the cost of repairs and any other costs associated with bring the car to "Retail value". If you have scratches in the paint, need new tires/brakes/shocks, chips in the windshield etc....get estimates for all those and deduct it from KBB value and that is your offer. Toyota want 4k I filed a motion to redeem for $386.00 we settled at $1500 over two months in two payments. It is very expensive for them to pay an attorney to go to court and then repossess the car and sell it at auction so they have an incentive to deal after you file a motion to redeem. Remember the judge will either grant or deny our motion if you actually go to court and if he denies it you just surrender the car and you are no worse off than if you do not file a motion to redeem. They cannot take your car when you file. The moment you file the Automatic Stay is in effect and they cannot take your car until you are discharged, case dismissed or they file a motion for relief from stay which takes at least 30 days. If they do take your car they have to give it back.Comment
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