Letting Car go while in active 13...

[jetsfan2010]

I posted this is the 13 forum, but perhaps might get more help here:

I am in an active 13, only 5 months in. My only car(06 altima) is getting up in miles due to the nature of my job. I have almost 100k already. The book value for the car about 9-10k right now, though the lender claim in my BK is 21k. I still have nearly 4 1/2 years left in the plan, and know the car wont make it the whole way.

I have 2 questions

1. If I wanted to let the car go back, would the lender sell the car at auction, and the deficiency balance go into my plan?

2. Would it be possible to finance another car while in a 13?

Thanks

[despritfreya]

1. Yes. . . You would amend your Plan to show the surrender and remove any funding that was earmarked for the vehicle if it was being paid through the Plan. The lender would then seek "stay relief", sell the vehicle, apply what it gets to the loan and then amend its proof of claim from secured to unsecured status for the deficiency. Unless you are a 100% Plan, there should not be much of a change in the overall payback. (There are one or two jurisdictions that will not allow the surrender if the Plan has been Confirmed. Off the top of my head I do not know which ones and if the Plan has not been Confirmed it is not an issue.)

2. Yes. . . You can finance the purchase of a vehicle while in a 13. You must first find a lender willing to loan and then you must get Court approval. You will have to file a new I&J showing that even with the new vehicle payment you can afford the Plan payment (presumably as set up in the Amended Plan that surrenders the vehicle).

Des.

[jetsfan2010]

We are in a 100 percent plan currently, how would the deficency balance effect payments then?

[despritfreya]

We are in a 100 percent plan currently, how would the deficency balance effect payments then?

That sucks - hate 100% plans. However, it is not all that bad. Right now you are paying 100% of the car loan. Once the lender sells it and amends its claim, the actual amount you pay out will be reduced to whatever remains on the loan. (You will need to stay on top of the creditor to make sure it amends its claim.) Either you would continue to make the payments you are making and the Plan will end early or you will reduce the payment and remain in the case for the balance of the 60 months. Makes sense???

Des.

[jetsfan2010]

Makes sense. My only concern is that they will low ball and sell it extremely low and I still get stuck with a crazy amt of deficency balance...