Will they take my car?

[Ajsmom513]

Hi,

I filed for chapter 7 on June 15 and my 341 meeting is July 17th, i just have a question about my car.

My car is financed through Wells Fargo and I have approximately 8 payments left, the balance on the loan right now is $2431 I believe. The problem I have is that about a year ago I got behind on the payments for 1 month and never really "caught up" so to speak with that one payment, so that now when i make my payments i am almost 30 days behind every month, and i cannot make a double payment anytime soon to get "caught up".

My payment is due the 18th of every month. So for example, i just made the payment last week but not for June, it was for May, so as of today I am technically 2 days late with my June payment but i will not be able to pay that until the July payment is almost due, so for a few days every month i am actually current on the loan, know what I mean? My question is how will this affect me in the next couple months as i go through my 341 meeting and then the 60-90 days waiting for discharge, and even after discharge? I figured i will have about 4 more payments left on the car by the time I am discharged. Also my car is worth about $6000 according to what my attny put on the petition so i definitely am not underwater and NEED to keep this car. Will i be ok as long as i do NOT go past the 30 days every month and make the payment before the current one is actually due?

Any and all advise is greatly appreciated.

[LadyInTheRed]

Nobody other than Wells Fargo can definitively answer your question.

I doubt they will repossess the car when your payments are not quite 30 days delinquent, but unless there is something in the loan agreement to require that you be more delinquent, there is no guaranty they won't repossess it. They aren't likely to go to the trouble of filing for relief from automatic stay so they can repossess before your discharge and would probably wait until after discharge if they were going to repossess. Assuming you are very confident that you will be able to keep paying on the schedule you have been, I suggest you talk to your attorney about reaffirming the loan on the condition that Wells Fargo agrees not to repossess the car unless you are more than 30 days late. Better yet, go for 45 or 60 days just to give yourself some breathing room. I don't know how likely Wells Fargo is to agree to those kind of terms, but it seems preferable to having to repossess the car.

[Ajsmom513]

Nobody other than Wells Fargo can definitively answer your question.

I doubt they will repossess the car when your payments are not quite 30 days delinquent, but unless there is something in the loan agreement to require that you be more delinquent, there is no guaranty they won't repossess it. They aren't likely to go to the trouble of filing for relief from automatic stay so they can repossess before your discharge and would probably wait until after discharge if they were going to repossess. Assuming you are very confident that you will be able to keep paying on the schedule you have been, I suggest you talk to your attorney about reaffirming the loan on the condition that Wells Fargo agrees not to repossess the car unless you are more than 30 days late. Better yet, go for 45 or 60 days just to give yourself some breathing room. I don't know how likely Wells Fargo is to agree to those kind of terms, but it seems preferable to having to repossess the car.

Thanks Lady, I have already spoken with my attorney about reaffirming and he said that although I have stated in my petition that i am Retaining and plan to Reaffirm, he said he is not going to send in the reaffirmation because he said the Trustee will never allow me to reaffirm even if it was required because i am in the negative with debt to income ratio, he said that would be setting me up to fail and if something happens to the car i would be liable for a car that I can't even drive.

i am absoultely positive that I can make the monthly payments, I have put myself on a VERY strict budget since contemplating BK .
My bills are always the same amount evry month and I have a certain amount taken out of my paycheck every 2 weeks and have direct deposited into my "bills" account and that is what I use to pay my monthly bills, I NEVER take money out of there for anything else. The rest of my paycheck gets put into my "personal " account and that is what I have for spending money until the next paycheck comes in ( with a little bit put into my slush account to try and save). So there is no question that i will not pay the loan every month, just don't have any extra to put aside for an extra payment to really get caught up.

[Ajsmom513]

Also, should I call Wells Fargo and discuss the situatuon with them and ask what their policy is on this ahead of time? I haven't even had my 341 yet, (coming up next month, the 17th) so should I wait it out? Will I get a letter first if they do indeed decide to reposess?

[LadyInTheRed]

Sounds like you have an attorney who is watching out for you!

There really isn't much point in talking to Wells Fargo right now. You will get notice if they petition for a relief from stay. If there is any way you can start making timely payments, you should. If you can't do that before discharge, I suggest you call them after discharge and tell them you plan to pay off the loan, but will likely always be close to 30 days late in payments. Be ready to pay late penalties in order to get title to the car.

Lenders are pretty aggressive about calling to try to get payments before repossessing. So, you will probably know before they are about to repossess. But, there is never any guaranty. If you can, keep the car in a locked garage until you have the title or make timely payments.

[Ajsmom513]

Sounds like you have an attorney who is watching out for you!

There really isn't much point in talking to Wells Fargo right now. You will get notice if they petition for a relief from stay. If there is any way you can start making timely payments, you should. If you can't do that before discharge, I suggest you call them after discharge and tell them you plan to pay off the loan, but will likely always be close to 30 days late in payments. Be ready to pay late penalties in order to get title to the car.

Lenders are pretty aggressive about calling to try to get payments before repossessing. So, you will probably know before they are about to repossess. But, there is never any guaranty. If you can, keep the car in a locked garage until you have the title or make timely payments.

Thanks Lady, yes I am very happy with my attorney, have been comfortable with him from the first consultation and have always felt he has had my best interests at heart so no issues there :-)

Thanks for the advice, i am definitely going to try and get caught up before the actual discharge date, will I be ok then at least until the actual discharge date do you think as long as i am current by that date?

[LadyInTheRed]

Thanks for the advice, i am definitely going to try and get caught up before the actual discharge date, will I be ok then at least until the actual discharge date do you think as long as i am current by that date?

No guaranties, but most likely. I belive the automatic stay does expire at some point in a Chap 7, but I don't know the details. Maybe somebody else will chime in. If not, ask your attorney. I really think Wells Fargo would rather charge you late fees then repossess for delinquencies of less than 30 days.

[Ajsmom513]

good to know thanks