Upside down in car, but...

[caj0524]

So yes, I am refiling. I was confirmed twice... I'll get confirmed again.

As I am always looking to save myself money, I came across the quote below...



I can't believe I missed this the first time through... I've only had the van for 14 months, but it looks like the trade-in/negative equity amount can be stripped from my plan. Correct?

[AngelinaCatHub]

Cool. Good point. Let us know that outcome. 'Hub

[tigergem]

Yeah but what about the 910 day rule? Want to read it again and be sure you didn't take that out of context? Otherwise... cool. Good luck.

[justbroke]

In re Penrod, 392 B.R. 835 (9th Cir. BAP 2008)
1) A lender’s payoff of the deficiency on the trade-in is not secured by the purchase money security interest in the new car, and is not thereby protected by the hanging paragraph.

Not so fast. After much studying for my own situation, I have become very well versed on this topic. First, you are not in the 9th Circuit because you list Illinois as your home State, so this ruling doesn't affect you. Second, whether the money used to pay-off a trade-in is considered as "purchase money" is based on underlying State non-bankruptcy law.

Almost all States just copied the United States Code (USC) definition of "purchase money" and so in almost all States, the money used to payoff the trade-in is considered money used to effectuate the terms on the contract of sale. In other words, you wouldn't have the deal without the trade-in negative equity being included in your loan, and as such, that money is part of the deal or "purchase" of the vehicle.

Please make sure that your State -- Illinois -- address' the definition of "purchase money" in the Statutes in such a way that only the value of the car can be used in the definition of "purchase money".

[tigergem]

Y'all make me very glad I didn't have these kinds of complications to deal with. It makes my head spin sometimes to even think about some of the stuff that comes up here.