Credit Acceptance?

[Blossoms]

Hello,

Has anyone here had any experience with including an auto financed through Credit Acceptance, in a Chapter 7 bankruptcy? My husband and I just filed a Chapter 7 on October 27th. We are surrendering our vehicle in the bankruptcy. We took a terrible deal on it (out of desperation) in February, after our other (nicer, newer) vehicle was repoed. It's 10 years old, over 100,000 miles, needs a ton of work, and we owe over $11,000 on it, when it's only worth about $3,000, tops. We also have a 24% interest rate on the loan.

In any case, I am wondering when Credit Acceptance will send someone to repo our vehicle? It's our only vehicle. My husband needs to drive to work - public transportation isn't a good option, due to the distance of his job from our house. I'm just worried about it getting taken before we can get another vehicle.

We're trying to scrape up enough money to buy an older used car for cash, maybe through Craig's List, but haven't been able to do so yet, due to me being laid off unexpectedly from my job, right before we filed the BK.

I'm just trying to figure out how much longer we might able to drive the vehicle before it gets repoed. We have our 341 meeting coming up on December 5th. We were up to date on the payments on the car before filing, if that info helps. I did not pay our November payment however, which was due November 14th.

Thanks in advance for any replies!

[justbroke]

You could actually "redeem" that vehicle for current market value. In a Chapter 7, you can file a Motion to Redeem and have the vehicle valued at "current' market value (as of the date of the hearing on valuation/redemption). You will need to have some exempt funds available to pay for it, or get a new loan (high interest loan from 722 Redemption/US Bank are available).

The redemption option should only be taken if the vehicle is "livable". Hopefully, there would be no "minimum" 722 Redemption loan. If the loan is a 24/month loan on $3,000 at 18%, then it would be $145/month (approximately).

Just something else to consider. Of course, this 722 Redemption option needs to be acted on very soon (usually before discharge). (Qualifying for a 722 Redemption loan is relative easy, so long as you can afford the payments.)

So, two options really. Either do a "ride through" by continuing to pay $11,000 for that vehicle -- and walk whenever you want, or get a 722 Redemption loan and redeem for current market value (CMV). Please note that CMV is usually the average clean wholesale value (usually trade-in value).

[keepmine]

Nobody can really answer your question. Just depends on if the lender wants to go through the motions and expense of filing for relief from stay.
Odds are, if the value is only $3K, they'll wait until discharge.

[Blossoms]

Thanks for the replies! I read that the automatic stay lasts until 45 days after the 341 meeting? Is that correct? Does it mean that the stay expires before the discharge?

[justbroke]

Thanks for the replies! I read that the automatic stay lasts until 45 days after the 341 meeting? Is that correct? Does it mean that the stay expires before the discharge?

Technically, the automatic stay has several endings!? When it comes to secured debt, it depends on what's on your Statement of Intentions. (Secured debt like your car, home, etc.) The automatic stay "technically" ends on day 45 after the 341 Meeting (11 USC 521(a)(6)) if you do not take steps to either Redeem (11 USC 722) or Reaffirm the vehicle. The automatic stay could also end due to multi-filings (serial filing could cause it to end 30-days after filing or for it not to even be invoked). The automatic stay could also end upon the earlier of discharge, abandonment by the Trustee, the case being dismissed, or the case closing, whichever comers first.

While the stay technically ends on day 45 after the 341 Meeting (technically 15 days before the first day you become eligible to be discharged), most secured creditors would NOT attempt foreclosure ore repossession. This is out of an abundance of caution because violations of the stay can be VERY costly. Lenders who read your Statement of Intentions and see that you are not going to Redeem or Reaffirm (or "stay and pay" for a walkthrough, if allowed) may file a Motion for Relief From the Automatic Stay (MRFS) to make sure that they have not only the technical but the actual ability to seek a remedy.

I hope that helps! I tried to make it easy to read.

[Blossoms]

Thanks! Our attorney did put that we are surrendering the vehicle, on the Statement of Intentions. I've been checking PACER every day, to make sure the lender hasn't filed for a relief from stay, but haven't seen one (yet). I'm hoping they'll wait at least the 45 days after the 341 meeting, to come take the vehicle.

Also, on another, slightly related question... My husband and I are currently renting a house. We are up to date on our rent, and want to stay in the house, as we just signed a two year lease a few months before filing the bankruptcy. Our attorney had listed the lease in our petition, and checked "assume" for the lease, on the Statement of Intentions. Is there anything special that we need to do, regarding the lease? Or will the lease just continue on after the bankruptcy, like we had never filed?

[justbroke]

There is nothing that you need to do. Your attorney has selected that you assume the lease, so the lease will continue in full force after discharge. Just keep paying on time!