722 Motion to Redeem-Settlement

[1richard1]

My attorney is willing to file a "Motion to Redeem," settlement with the bank since the vehicle is inoperable, engine failure.

Questions:

1. Does the "bankruptcy trustee" decide the Fair Market Value through Kelley Blue Book and, or NADA or does it ultimately come down to the bank willing to "accept or deny the Motion to Redeem?" Meaning, whom determines the final value for the car and outcome, trustee or bank?

2. My attorney is going to provide the bankruptcy trustee the repair work order, new engine required for the car. It shows over $9,000 for a new engine, labor from the dealership required. The documentation was prepared by the service department at our local GMC Pontiac dealership. All verifiable if the bank wants to even call the dealership service manager. Does the "bankruptcy trustee" deduct the repair costs from the Kelley Blue Book and or NADA value?

3. Or, does it all come down to whatever amount the bank will agree to through settlement?

The payoff balance is approx. $13,700, yet car needs over $9,000 for a new engine plus labor. I did speak with my attorney about it, he's willing to file the motion yet he'd require his fee be paid upfront along with court costs for the motion. I was thinking of settling for $4,000. Otherwise, bank will sell the car at auction in June. It would have to be sold as an inoperable vehicle, salvaged title.

We have a family member, an uncle at another General Motors car dealership, in management willing to get the engine rebuilt and waive most the labor costs involved.
So, just don't know if the value for the car is the bankruptcy trustees decision, or if the bank can make the final decision.

[freddysmith]

You could check any of the car value books BB, Kelly. or Edmonds I think you will find that there is not alot difference. 13,700 payoff, 9000 repairs, Why would you want it to even think of keeping it, let the bank have it. You didnt say what year or if you even checked the value your self but at the figures you did give I dont see any thing that would make me think you would even consider keeping it.

[justbroke]

It is not the Bankruptcy Trustee that determines value. It is up to the Judge to define the value. This is why it's done by Motion. The Judge establishes the value based on the evidence presented.

[1richard1]

Ok, the BK judge makes the final determination as to the car value, if my BK attorney files a motion.

The car is a 2006 Pontiac Gto.

In the meantime, the lienholder, bank for the car is open to a settlement through their bankruptcy department. They said that once faxing them the service records from the GMC Pontiac dealership service manager that their manager will review the documentation. At that point within 48 hours they'll respond as to their offer to a settlement and release of title. Further, that my attorney and I would have 10 days to wire transfer or provide them the funds in full.

Here' my question: During an open bankruptcy proceeding, is it legitimate for this to transpire? Meaning, can the bank and I do this during an open BK proceeding? My attorney said he'd call my bank this week, speak to the BK dept. He could not make any promises, yet to say if this does not work out he'd have to file the motion, have the judge make the final decision. I simply question whether a settlement can be reached in writing from the bank, during an open BK 7.

[justbroke]

Yes, you can negotiate! They just can't attempt to "collect" or "demand" payments. I made negotiations with my auto loan lender as well. It was more like they tried to pull one over on me, and I kindly reminded their attorney the caselaw in my District/Circuit and that the value of the car was based on clean retail on the day of the hearing... not from the 2 years prior that I filed a Chapter 13. It was fund educating the out-of-state attorney on the finer points of practicing in the Bankruptcy Courts in Florida!

It's not really a settlement. It would be a stipulation to the Motion To Redeem. (I'm assuming this is a Motion to Redeem, where you ask the Judge to "value" the car at the same time.)

[1richard1]

Well, the lienholder Wells Fargo Dealer Services DENIED any form of settlement offer. The manager would not even counter, advised verbally they wanted the Fair Market Value of $14,750. Which was absurd, being the vehicle has a blown engine. BK manager whom reviewed the settlement offer even had the General Motors/Pontiac dealership service managers work order showing over $11,000 for a new engine, labor involved, state sales tax, along with the service managers business card and a lengthy letter explaining the details.

Just goes to show you, banks are NOT our friend. Told them they can keep it, sell it at auction with a salvaged, non operable title and would be lucky to recoup even my offer of $3-$4 k maximum. Goes to auction in a couple days and their loss. On credit report it shows as $0 balance, $0 payment and included in BK7. Even our BK attorney said to let it go, was more then reasonable with them.

[justbroke]

That is a perfect choice to make them "eat steel" (the expression used amongst bankruptcy attorneys). I hope that it tasted good to them!!!

[1richard1]

With a "voluntary" surrender of a vehicle during an open Ch. 7 bankruptcy proceeding can the bank sell the car now? Meaning, can the bank go ahead and auction it off for sell? Or, does the bank have to file a motion granting them permission to sell the car during the bankruptcy process? Just curious.

Lastly, with a voluntary surrender whatever the defiency balance is after the car gets sold the bk 7 wipes out this balance right? Thanks again for the info.