need help asap regarding auto loan

[jayd4wg]

My wife and I filed a c7 bk approx 3.5 years ago. When we filed, we allowed our existing vehicle to go to reposession and immediately secureda new vehicle and filed paperwork with our atty to reaffirm the loan. Toyota motor finance and our atty apparently never finished this though and we were beyond naive about the technicalities involved. Long story short, the car we have been paying on for almost4 years now is considered to be part of the bankruptcy according to our three credit retorts and Toyota Motor finance will not relinquish the title...I believe it to be in the hands of the court. We were attempting to trade in today but we're not having any luck and pulled the plug on the deal we worked out today to make sure what we are being told was correct. We have not misseda payment and always have been one payment ahead. We were told today that the car cannot be traded. That we would be basically walking away from the loan as if we have already been repo'd but we are still driving the car and making payments. We have approx 10k left to pay on the original loan amt which is about the same amount worth on a tradein. If we had gone thru with the trade today, I think Toyota would take possession of the vehicle, and still take us for the full amount of the loan (or the remainder of what is unpaid plus any and all recovery fees)which is NOT what the dealer told us today. Today wood have amounted to starting a new loan from scratch. I'm also fearful that if we had or when we do pay the full amount we will never see the title. Curious what you guys have to say here... Thanks in advance!

[justbroke]

When did you buy the new car? Before you filed or after you filed. It makes a VERY big difference.

If you had purchased this new car prior to filing, then the car was included in the bankruptcy and discharged since your reaffirmation agreement was probably not signed by your attorney prior to discharge. (It could be your attorney and not TFS.)

Just so that you are aware, the title is controlled by non-bankruptcy laws. When you pay the underlying debt, you will receive the title. Here's a very technical reason for this. If you purchased this car right before filing, there was no way you could cram it down to the actual value. So, the lien would pass unaffected by the bankruptcy discharge, even though your personal responsibility to pay would be discharged. You would need to pay the auto lender the total value of the loan. At such time you pay the loan off, you could trade the car.

As for trading a car discharged in a bankruptcy, I don't understand that specific issue. I have traded a discharged car loan. Again, the lien is the lien is the lien. You trade the car as normal and the dealership pays off the old lien (loan). Then the old lienholder sends the title to the dealership (or electronically releases it in Florida).

If you are having issues with TFS (Toyota Financial Services) shop the loan elsewhere! Even a Toyota dealership has contacts amongst other lenders!

(As an aside, I am happy that your reaffirmation didn't get completed. You could walk from that car like NOTHING HAPPENED, and just let them come and get it. Why use the negative equity and finance it into a new car? Have you talked to your attorney???)

[jayd4wg]

That negative equity thing is exactly whyi came here for research first. It's like i have been leasing a car for the past few years. Even the sales manager said the same thing, which is what they are telling me to do. Leave the old and start a new loan. I just don't wanttoyota cgasing me down for tge remaining 10k and recovery expenses.
We boughtjust before the bk as suggested to do by our atty. It's just that thereaffirmation ppwk never completed I guess :shrug:

[justbroke]

If the reaffirmation was never signed by your attorney and then sent to the creditor, you do not have a reaffirmation and the debt was discharged. You could not be in a better position if you ask me! I would double check with my attorney and recheck PACER to make sure that no reaffirmation agreement was filed. If all is good, then you can tell the existing car lender to come and get their car. You would not be responsible since the underlying debt was discharged.

[LadyInTheRed]

I just don't wanttoyota cgasing me down for tge remaining 10k and recovery expenses.

They can't charge you anything if you didn't reaffirm the loan.

If I were you, I'd delay the purchase of the new car, stop paying on the car you have now, and drive it until they come and get it. Put the saved payments towards your down payment for the new car.

Because I am me, I'd continue to pay on and drive the car you have until you at least have some equity. Do you really need a new car 3.5 years after buying the one you have?

[justbroke]

LITR's alternate plane is also viable.

[jayd4wg]

Need...no. but we have outgrown the rav. Looking at this in an intelligent way, thinking about letting wife drivemy optima, drop the rav, and I'll pay cash for a beaterto go back and forth to work for a while and save some dough for a down payment on the car we really want. A beater truck will satisfy some other needs in our immediate future as well

[jayd4wg]

PACER confirms that the loan was never reaffirmed. this is both a blessing and sucks at the same time. Sucks because i'll never be able to finance thru TMF again...BUT, i can get out of this thing while still upside down and this is a financial GAIN for me to a much higher degree after I had time to look at the books. I'm about 6k upside down right now...depending on trade values.