To Redeem Or Not To Redeem Vehicle

[Tater]

We are getting ready to file Chapter 7 next week. We have a 12 year old car with over 150,000 miles on it but took a loan out on it a couple of years ago and we owe around $6,000 on it. Stupid mistake and lesson learned! Anyway, the lawyer wants us to redeem it for the fair market value which would be between $800-900 if she can get the lender to agree to it. At first, it seemed like a good idea. Now, the car is starting to have transmission problems and won't go in reverse. We mainly drive it to run errands since it smaller than our other vehicle.

Could we just let the car go totally during the bankruptcy process? My lawyer is out of the office until Tuesday and was just curious. I don't really want to pay to redeem a vehicle we will probably just end up scrapping. We can get buy with one vehicle so it's no big loss to us. Thanks in advance !

[jst4f]

A old car with transmission problems is not part of getting a fresh start. Since you have other cars, I would let it go.

[btbeme]

Cars cost money even if just sitting (and leaking tranny fluid) in the driveway. SInce the lien on the car is much much more than the car is worth, I'd let it go and not even consider anything else.

Redemption will cost money. A transmission repair will cost around $2000. Insurance costs money. Add it all up and you have a $3000 cost in trying to keep it, plus the hassle of the redemption and the very unlikely event that the lender will agree.

That pays for a lot of gas for the other cars.

[Tater]

That is my thought process too. We needed the payment to pass the means test so I am hoping we can still surrender the vehicle or let it go. Will know more Tuesday once we complete our petition appointment.