How can we avoid consensual lein Chapter 7???

[Tracie]

Please help. We received notice that automatic stay lift has been requested for a loan that we used our car as collateral for. We are behind in payments and are trying to reaffirm. The only reason we filed pro se is because we simply could not afford legal help. After researching I see that tools of the trade are the only way to avoid repo of this car. Does sales qualify as tools of the trade? Thank you.

[AngelinaCatHub]

Please help. We received notice that automatic stay lift has been requested for a loan that we used our car as collateral for. We are behind in payments and are trying to reaffirm. The only reason we filed pro se is because we simply could not afford legal help. After researching I see that tools of the trade are the only way to avoid repo of this car. Does sales qualify as tools of the trade? Thank you.

In any case your car would not be considered a tool of trade. It is secured debt and they are attempting to repo it. You won't get a reaffirmation on the note if you are behind in payments now, and the Judge is probably not likely to approve it anyway.

Your only hope to save the car is bring the payments to date. You don't need to reaffirm if you "pay through" as they want your money not your car. It is important to not get late though.

Another solution is to buy a used car. I just purchased a 93 Ford Explorer 4X4 for $800, put $200 into it and it runs great with good rubber. If it goes bad, I can get at least $300 for the weight of steel and the junk yard.

There are a bunch of good used cars for little money as many people are dumping extra things to pay their own bills. Might consider this. "Paid off cars get better gas mileage". 'Hub

[justbroke]

Please help. We received notice that automatic stay lift has been requested for a loan that we used our car as collateral for. We are behind in payments and are trying to reaffirm. The only reason we filed pro se is because we simply could not afford legal help. After researching I see that tools of the trade are the only way to avoid repo of this car. Does sales qualify as tools of the trade? Thank you.

Unfortunately, you may have filed without understanding the intricate nature of secured debt and being in default when you file. As is normal, the lender immediately filed a motion for relief from the automatic stay. They are likely to win this quite easily. If this were a tool of the trade, like a 100% dedicated vehicle you used in a service business -- like plumbing, carpentry, etc -- and it was exclusively business and treated as such on prior year tax returns, you could make a "claim" that any equity is exempt.

The real problem is that this is secured debt and you can't just avoid the lien.

Lien avoidance is where the lien impairs another exemption. The only liens that are avoidable are ones that are usually on household goods (See 11 USC 522(f)). A consensual lien is a different animal. You pledged the vehicle as collateral for the loan. You can't now go back and avoid the lien because of some exemption. That would be unfair the the lender as they'd never have recourse in the security instrument (the vehicle itself).

I would heed Mr. Hub's advice and start looking for a new (old) vehicle or bring the loan current. The lender is going to have the motion granted and will start the repossession process. You may want to "redeem" the vehicle, as it's not too late. This will cost you a lost (high interest rate near or over 20%), but you could redeem it for its current value (if you purchased it more than 910 days ago). If you do not understand exemption on 11 USC 722, then ask more questions. I don't see any other way other than a.) coming current or b.) redemption.

Unfortunately, you find yourself where many pro se debtors find themselves when it comes to secured debt. I can help you navigate some of the Redemption requirements, but that's a decision you need to make. You will also need to be approved for the redemption loan.

[HHM]

Short answer, you can't.

[AngelinaCatHub]

Longer short answer, we are all correct. This is why we all endured a "new start" and learn by it. 'Hub

[Tracie]

Thank You

You all are super helpful. We did put the car on our 2009 tax return as a business expense. We're not trying to get out of paying for the vehicle. We're trying to save it. We would like to pay the past due but its impossible right now. We were hoping this would motivate the lender to make a better payment option for us. Do you think that's possible?
Thanks again.

[biotechsolution]

I don't think that will work. They will just reposess and sell it for what they can get out it.

[justbroke]

You all are super helpful. We did put the car on our 2009 tax return as a business expense. We're not trying to get out of paying for the vehicle. We're trying to save it. We would like to pay the past due but its impossible right now. We were hoping this would motivate the lender to make a better payment option for us. Do you think that's possible?
Thanks again.

The lender is under no obligation to do so, and most will rather repossess the vehicle. This is because you will have no responsibility upon discharge and they will just watch any equity dwindle away, as they lose more money. I have not heard of any automobile lender redoing the interest rate for a better payment. You could have negotiated a reaffirmation with a lower percentage, but reaffirmations are frowned upon anyhow unless you REALLY need to.

Additionally, redemption is the usually manner to get the vehicles value back down to reality. There has been extremely limited successes in negotiating something different, but again, it would require a reaffirmation.

Being pro se and unfamiliar in this territory, it will be extremely difficult to come out of this without losing the vehicle, unless you do one of the items I listed earlier.