Worried Sick

[samnedworthy]

Here's the situation:

Have a Toyota that we've made payments on for the last 3 years with 3 years to go - suffered a car insurance lapse for about 45 days and car payment ran just over one month late because our home was about to be foreclosed on and had to borrow some money to cut a cashiers check for 3k to resolve(yes, we've got many problems...sigh)

Well Mercantile Bank (the lender) has always worked with me when I run behind with my car payment, and I told the lady the month before that the next payment would be a little late because of the house situation - she said no prob.

So I call to make the 2 car payments to catch everything up this month and they say it's too late - the car's out for repo - I guess I defaulted when the insurance lapsed, even though the insurance is current now.

I offered to pay the 2 payments and whatever insurance and fees, but they're refusing payment - so I'm filing for Chapter 13 today because I HAVE to keep my car. If they sell it, I know I'll just wind up owing them 3 or 4 grand at least and still have no car.

I spoke with the repo guy when he showed up yesterday and he was actually pretty decent, giving me his cell and just told me to call him if I was going to play hide and seek with the car so he didn't waste a lot of his time - of course he also said he'd just get a writ of replevin and come back and get it with the police - but I don't know how long that takes, and I'm not waiting.

SO HERE'S the QUESTION:

if I file chapter 13, will I still be able to keep the car (while making payments of course) - even though the loan company states the reason for the default as lack of insurance? And does anyone know how long it actually takes to get a writ of replevin? I'm meeting with the attorney today but I'd just like to know what to expect...will the repo stop immediately, or should I watch my (car's) back for the next few days, or weeks?

Thanks

[AngelinaCatHub]

The minute you file 13 or 7 they cannot touch the car. You must by law have insurance on the car and full coverage if financed for the protection of the asset. If you do NOT get coverage for the car, the bank can legally purchase it for the car and add it to the debt. You could reaffirm the car with the bank but you need the blessing of the Court to do that. It would be better to file 7 if you are able to do so. It will still stop the repo. 'Hub

[justbroke]

First, I would never recommend filing Chapter 13, just to save a car. Second, Chapter 13s are much more complex than Chapter 7s, because you have to factor in creating a feasible and confirmable plan of reorganization.

if I file chapter 13, will I still be able to keep the car (while making payments of course) - even though the loan company states the reason for the default as lack of insurance? And does anyone know how long it actually takes to get a writ of replevin? I'm meeting with the attorney today but I'd just like to know what to expect...will the repo stop immediately, or should I watch my (car's) back for the next few days, or weeks?

The repossession won't stop until you actually file. I really don't know why one would file Chapter 13 just to keep a car that is $4-5k underwater. You're going to spend a lot, just on an attorney. If you can afford to spend $2-3K on an attorney, why not by a beater for a while, save up, and then buy a newer car?

In any event, a Chapter 7 may be better, with a redemption. May be better... I just don't know. However, using a powerful tool like bankruptcy, just to save a car... isn't the best use of such a tool. Like using a bazooka to kill a flea.

Just wondering.

[AngelinaCatHub]

One question and suggestion, what do you owe, what are the payments? There are many good used cars glutting our economy now. You could possibly get a good one for two of you car payments. Keep the used car below exempt value. Then give them their car back and let them choke on it. Mrs. drives an old police car we got at auction for 800 bucks four years ago. Looks like what it is, but runs like a top. 'Hub

[AngelinaCatHub]

JB, you trumped me again. That was exactly what I was saying. There are so many used cars and also in our paper, no equity take over payments cars, so people are dumping things big time for dollars. Second cars are being sold to pay late mortgage payments etc. We purchased a NICE Chrysler, single owner, non smoker, 80k fully loaded used car for $1500 from an estate. We gave it to our god-daughter and she wrecked it. Point is, a car is used the minute you sign the paperwork. 'Hub

[samnedworthy]

Thanks for the feedback everyone.

Yeah, we had considered just giving the car back and sucking it up, but we've also heard a ton of horror stories about people having to pay back $5-6k on a car they don't own anymore - she does have some pretty bad cc debt as well on top of the car....we're meeting with the attorney this afternoon to discuss the best options - I'll let you know what happens!

[justbroke]

Thank you samnedworthy. If there is other burdensome credit card debt, it may be worth it. However, if that car is worth $5-6K less than the balance on the loan, then bankruptcy can still help. Your attorney should be able to discuss all the available tools.

[dscurlock]

Being late on anything is life. in todays economy, i find it absurd that your car bank opts to come repo the car rather then taking your 2 payments to get caught up, so rather then just taking your money, they would rather deal with the repo on a car, and most cars are upside down once they leave the lot...if my bank ever refused my payment, I would tell them to come get the car, and be prepared to settle for a loss.

since you have paid on the car for 3 years, they have already made their money...they will just
repo the car, and sell it at auction, and leave you with the balance...so to them, it is not really a loss.

[dscurlock]

One question and suggestion, what do you owe, what are the payments? There are many good used cars glutting our economy now. You could possibly get a good one for two of you car payments. Keep the used car below exempt value. Then give them their car back and let them choke on it. Mrs. drives an old police car we got at auction for 800 bucks four years ago. Looks like what it is, but runs like a top. 'Hub

I bought my last two vehicles on craigslist...owe nothing on them. they do have over 100k, I have had little problems with so far, and so far they seem to run fairly good, so for $2k or less, you can find a decent running car from CL. I figure why spend $20k for a car that you just use to go to work when you can find one on CL for much cheaper, so it pays for itself very quickly...

[NHC]

Here's the situation:

Have a Toyota that we've made payments on for the last 3 years with 3 years to go - suffered a car insurance lapse for about 45 days and car payment ran just over one month late because our home was about to be foreclosed on and had to borrow some money to cut a cashiers check for 3k to resolve(yes, we've got many problems...sigh)

Well Mercantile Bank (the lender) has always worked with me when I run behind with my car payment, and I told the lady the month before that the next payment would be a little late because of the house situation - she said no prob.

So I call to make the 2 car payments to catch everything up this month and they say it's too late - the car's out for repo - I guess I defaulted when the insurance lapsed, even though the insurance is current now.

I offered to pay the 2 payments and whatever insurance and fees, but they're refusing payment - so I'm filing for Chapter 13 today because I HAVE to keep my car. If they sell it, I know I'll just wind up owing them 3 or 4 grand at least and still have no car.

I spoke with the repo guy when he showed up yesterday and he was actually pretty decent, giving me his cell and just told me to call him if I was going to play hide and seek with the car so he didn't waste a lot of his time - of course he also said he'd just get a writ of replevin and come back and get it with the police - but I don't know how long that takes, and I'm not waiting.

SO HERE'S the QUESTION:

if I file chapter 13, will I still be able to keep the car (while making payments of course) - even though the loan company states the reason for the default as lack of insurance? And does anyone know how long it actually takes to get a writ of replevin? I'm meeting with the attorney today but I'd just like to know what to expect...will the repo stop immediately, or should I watch my (car's) back for the next few days, or weeks?

Thanks

I was upside down in my car loan too....so I kept the insurance on the vehicle but quit making payments during my BK7....instead I set that money aside for a bit...then found a buy here, pay here car lot...and worked a deal with the manager...when my car got repo'd I would come get my 'new' car but in the meantime I would start making payments on my 'new' car. By the time my 'other' car was gone, I had actually given these folks enough money that they signed over the title when I went to pick up my 'new' car. (I didn't think they would do that....the sticker on the car was 4 grand and I had given them only 2 grand...) Okay...the car ain't nuttin to scream about...a 1995 Ford Bronco...but it runs great and works for me in the snow... just wait until my new parts come in from JC Whitney....woohooo.....I'll have a rock crawler in no time!

[nerves]

Another place to find good deals on vehicles is independent and asssisted living complexes. Just go to their main office and ask if they know of anyone selling a vehicle. Sometimes you can find a steal. The car may be 7-10 years old but usually have very low milage. There comes a point when grandma and grandpa can't drive.

[Exployer1234]

I would let the car go. I lost my job in Jan of 09'. I tried to work out payments with the lender, but they refused to work with me. They repo'ed the car on the 91st day. I was already upside down in the car by 6K. The bank sold the car for a rock bottom price and left me with 11 K to pay. After all the other fees added in I am back up to the original amount on the loan that was owed, plus I have no car. I am filing Chapter 7. I already had another car that was paid for, plus it is not worth much now, so it will not even be touched in my BK.

[jayalln]

Strange

You said that insurance lapsed for about 45 days and you believe that is the reason they are repossessing the vehicle. I want to ask a question what state are you in? Next lets get some things straight okay if you are 2 payments behind and you pay the debt they can't repossess the vehicle. Most states allow you the right to make the back payments as long as the vehicle has not been charged off. Now if it has been charged off and they still don't have it in their possession they can require full payment. Okay now back to the insurance part. I assume you have the insurance through them but it really makes no difference. Most banks don't know if you have insurance on the vehicle or not it is stated in the contract as long as you are under contract you are required to keep full coverage insurance. Now if the vehicle was not charged off and you offered to pay them the money if I were you I would have paid them the money and told them I was in line with the contract even if the insurance had lapsed for whatever time you now have insurance on the vehicle if they were to pick up the vehicle after that then they would have been in violation of the contractual agreement. And in most cases they can't charge off a debt until the 6 month usually so to say this yes they can repo your vehicle because you are behind but once you are caught up you are abiding by the agreement and if they repoed your vehicle you could file a suit against them for breaking the terms of the contractual agreement. If I were you I would have not filed bankruptcy unless I had other bills that were keeping me from being able to make all my payments on time. This does not seem to be the case with you. Remember filing bankruptcy is more costly and time consuming then it would be to satisfy your obligation in the contract and you would be doing that by making up the payments and keeping the vehicle insured something you already did. So remember once you make the payments they can't repo the vehicle unless the debt has been charged off and at that point they can ask for the entire balance owed on the loan. And yes they can also ask for the entire balance owed once the vehicle is repossessed and in their possession. I hope this post helps some.

[tigergem]

I bought my last two vehicles on craigslist...owe nothing on them. they do have over 100k, I have had little problems with so far, and so far they seem to run fairly good, so for $2k or less, you can find a decent running car from CL. I figure why spend $20k for a car that you just use to go to work when you can find one on CL for much cheaper, so it pays for itself very quickly...

I didn't buy mine on craigslist, but the local townie online bulletin board. $1k for the truck, which had a $6k blue book value at the end of 2009. $850 for a transmission. $459 for a rear axle. $250 for new front rotors, pads and calipers. Changed the plugs and plug wires and distributor cap. Still need to get two new tires. Thinking about replacing a leaky injector on the 6th cylinder. Other than that, it looks and runs great now. I'm still convinced I got the better end of the deal, and pretty sure I could probably slap a sign on it and sell it for $4-$5k in a minute if I had a mind to.