Question on Possible Repo Just Prior to Filing

[daver443]

I am about to file everything Pro-Se ( I couldnt afford a attorney if I tried)..

I have a SUV (my wifes) which we owe about 8k on and we are about 5 payments behind.. not avoiding paying just been rough and they cut my unemployment extension by $100 a month due to the sequester..

anyway, The bank sent someone to get the car the other night, My wife luckily(?) was out of town and I was honest with both the bank and the repo man, who threatened if he saw us driving around in it "Even at a redlight, I will Yank whoever out of the damn car and take it" I told him I doubt that was legal and I am sure that statement was due to him sitting in his truck with it already in reverse..

anyway.. if I file bankruptcy prior to them getting the vehicle, will it fall under the automatic stay? will they still be able to repo? or will they have to either wait, or file something with the court to be able to repo?

[malf1204]

Yes the moment you file the automatic stay takes effect and they cannot repo and if they do they are violating the stay and will have to give the car back. THey would have to file a motion for relief from the stay but that is expensive ($455 filing fee + attorneys fees) and it takes months so most just wait until discharge and then repo. You can do a cram down during CH 7. You can file a motion to buy the car for "market" value and discharge the loan. You have to have the $ or alternate financing though. I bought my 4K vehicle loan for $1500 during my BK.

[daver443]

...

Yes the moment you file the automatic stay takes effect and they cannot repo and if they do they are violating the stay and will have to give the car back. THey would have to file a motion for relief from the stay but that is expensive ($455 filing fee + attorneys fees) and it takes months so most just wait until discharge and then repo. You can do a cram down during CH 7. You can file a motion to buy the car for "market" value and discharge the loan. You have to have the $ or alternate financing though. I bought my 4K vehicle loan for $1500 during my BK.

you said they wait until discharge? I read somewhere the automatic stay was only for 30 days? where am I missing? (I am still researching prior to filing) and luckily in my district I only have to file a few forms initially and then 14 days for 90% of the others...

[despritfreya]

Yes the moment you file the automatic stay takes effect and they cannot repo and if they do they are violating the stay and will have to give the car back. THey would have to file a motion for relief from the stay but that is expensive ($455 filing fee + attorneys fees) and it takes months so most just wait until discharge and then repo. You can do a cram down during CH 7. You can file a motion to buy the car for "market" value and discharge the loan. You have to have the $ or alternate financing though. I bought my 4K vehicle loan for $1500 during my BK.

1. FF for a MLS is currently $176.00;

2. Many creditor attnys handle MLS’s on a fixed fee;

3. Once filed and noticed there is a 14 day response period. If no one files a response, the creditor simply submits an Order granting the Motion. Figure it takes the Judge 3 or so days to sign the Order. There is a 14 day waiting period from the time the Order is signed to the time it takes effect, unless the judge waives the waiting period. Based upon this, a creditor can have the stay lifted in just over 1 month after filing if a response is not filed;

4. Even if a MLS is not filed, the stay against personal property is automatically lifted 45 days after the 341 meeting if a debtor does not act on their intentions to either surrender, redeem or reaffirm.

However, I do agree that some will wait until the entry of the discharge and/or the closing of the case.

Des.

[malf1204]

Right but if his intention is to reaffirm and ask for a Chimm order the stay will be in affect until the outcome of that hearing. And if you file a simple objection to the motion to lift a stay you can stretch the process out. The Judges in MD frown on companies repoing cars before discharge with a lifting of the stay. Most do not want the hassle just wait a few months and avoid the risk of upsetting the bench.

[justbroke]

daver, the advice from despritfreya is what the law is. Malf1204 is writing about what is likely to happen. If you are filing pro se, you really need to determine what your INTENTIONS are with the vehicle and file as soon as possible. As stated, if the vehicle is worth only $4K, you could Motion to Redeem (under 11 USC 722), but you will need to show proof of the value, and you will need to have the money to redeem the vehicle before discharge. If you are going to redeem and use a loan, you should be working on the loan at or extremely close to the time that you file (722 Redemption is owned by US Bank is the only bank that I know of that does Redemption loans).

You also need to consider all other avenues including, but not limited to, surrender and reaffirmation.

I'm concerned about how you phrased your opening sentence reads. If you are filing alone, and your wife is not, and the vehicle is titled only in her name, this bankruptcy will probably not protect her personal property.

[daver443]

First thanks for all the help thus far, this forum has been a huge wealth of knowledge.

When I said it was my wife's car, I was meaning she drives it (its the typical Soccer Mom vehicle). It is titled in my name and financed through a credit union with my previous work (Tower Federal Credit Union). We owe approx 7800 on the vehicle as of last week, we are behind.

it is a 07 Honda CRV (lx) with approx 96k miles on it, according to KBB in fair condition (I consider it fair, dent in the hatch, stains in back seats (kids)). is 7300 trade and roughly 9500 retail

I also own a 07 Honda Accord Special Edition (V6) 145k - which is paid off kbb says fair condition trade is 5300 and retail is - 7618

(When I say retail I mean private party sale)

Is KBB a good source to use? I am just unsure what the court/trustee would use to assign value to these? I am really right on the line as far as if we should keep the CRV or not, however I would like to remove the past due and put it on the back of the loan would that be redemption? or can I file for reaffirmation and try to make a agreement with the lender?

[keepmine]

Here's a link to a site that does a good job of explaining a redemption. Tacking on past due payments to the end of the loan isn't a redemption.

http://www.722redemption.com/

Do not reaffirm. Once you sign a reaffirmation agreement, you're stuck. The lender has no reason to modify the terms of the loan.

[justbroke]

Another gotcha is that if you have other accounts at that credit union, you are likely to run into "cross-collaterialization". That's where each account is pledged for any other account. Make sure you don't have anything at that credit union that you care about... even if you reaffirm! Credit Unions are special and people have run into issues even when they did not reaffirm.

[daver443]

I do have a checking account with the credit union but I have long since used it, they do not have a branch close to my home so I went with a local bank and kept $5 in the account to stay a active member of the CU, and they have been good with me, I was behind previously and told them "I will catch up as well as pay off the accord, once I receive my tax refund" which I received the refund 45 days after that phone call, and I was already behind enough (in my mind ) that warranted repo.

Stating my intentions to redeem and then not redeeming (say financing doesnt work out) would that be a bad thing for me? as its a "statement of my intention" not a statement of fact or am I wrong on the courts view?

[daver443]

also, how long is the stay on my creditors? until after 341 meeting? or until discharge? I have read conflicting things between here, NOLO and another site

[justbroke]

The stay last until the earlier of the discharge being entered, the property being administered, a relief from stay being granted, abandonment by Trustee, you not honoring your intentions (for secured property - as specific on your Statement of Intentions), or the case being dismissed. If the Trustee is administering property, then the stay will stick until the case closes of the Trustee abandons the property.

So yes, they are conflicting depending on what it is! The stay ends 45 days after the 341 Meeting for secured property based on your statement of intentions.

Not being able to redeem, you just surrender. Your Statement of Intentions is not a statement of fact. It is a desire to do something and is not binding.

[daver443]

Ok, that was my understanding and my basic question, since it is called "Intention" but I also understand from previous court experience (unfortunately) that everything in law is not black and white, or even what I would presume is plain English.. so thank you again