Filed Ch 7 and have auto loan with a cosigner

[bkmom]

Filed Ch 7 in April and did not state my intent in regards to my car loan as I have a cosigner.

I know for a fact a reaffirmation is not doable as no judge will approve a $439 van payment on a $2200 monthly income (full time and part time job together).

My question is should I just amend my petition to surrender the van knowing that it'll revert back to my mother and I'll still be making the payments? The van is current on payments and has been since day 1 of the loan.

I don't want to burn my mother as she has pretty decent credit and I'd hate to be the downfall of that.

Any help is appreciated! I also welcome any suggestions!

[justbroke]

Just do the reaffirmation, or, if the vehicle is severely underwater, try a Redemption. Hopefully you have an attorney to help you, but if not... we are here!

So, your options really are still reaffirm, redeem (722 Redemption!), or surrender. If you surrender, yes they will continue to bill and require your mother to pay the note. However, you could still file a Reaffirmation agreement, have it denied by the judge, and do a ride-through! (I think the ride-through is the best option.)

[bcohen]

No! Do not amend your petition to say that you are planning to surrender the van. If you do, then the lender will file a motion for relief from the automatic stay so they can repossess, and the bankruptcy court will grant said motion since you said that you were planning to surrender it anyways. Once the van is repossessed, the lender will sell it at a distressed price (i.e. for much less than it's worth) and then go after your mom for the deficiency. Your mom will be sued for this debt, and you won't even have the van to drive.

A better strategy would be to say that you are going to reaffirm, but then don't actually go through with it. As long as you keep making the payments, you will continue to have the van, and your mom won't be bothered.

[bkmom]

Thanks for the quick response.

I'll amend the petition to reaffirm then. I'm unable to do a redemption as I do not have an attorney and the 722 redemption company that I'm seeing when I research these loans will not work with me as I do not have an attorney. Is there another company that offers redemption loans that I'm not aware of?

[justbroke]

I'll amend the petition to reaffirm then. I'm unable to do a redemption as I do not have an attorney and the 722 redemption company that I'm seeing when I research these loans will not work with me as I do not have an attorney. Is there another company that offers redemption loans that I'm not aware of?

Huh? I did a 722 Redemption loan through USBank and I was a Pro Se Chapter 13 debtor. The rate was rather high, 18-19% , but I refinanced the Redemption loan to 7.49% six months post discharge (through Navy Federal).

If you choose the redemption route, I implore you to do the math. If you currently have a very low interest rate, the redemption "could" make a higher payment. However, if you shave off $11K of the balance by reducing the amount paid to the old creditor through redemption, then the high interest rate may sting, but the payment may actually be lower (it was for me!). Having wrote that, I would still work to stay on time, clean up post discharge credit report, and get a new loan to refinance the redemption loan quickly (6-12 months after discharge). It worked for me.