Question regarding repossession of my mother-in-laws car

[ld2366eh]

Hi,

Everyone has always been very helpful to me in the past and I wanted to say thank you. And I need your help yet again. Here is the situation. My mother in law had filed no asset Chapter 7 and was discharged about a month ago. She had tried to reaffirm her car but the judge disallowed it due to undue hardship. She owes about $8K on a car that is probably worth about $4K. OK, fast forward a couple of weeks. The car (Chevy Malibu) started having electronic issues (the car is haunted). If you hit the door locks, the trunk pops open. Alarm sounds off for no reason, etc. Once, it wouldn't start for no reason. (Finally started later.) Probably a short somewhere in the electrical.

She has continued to retain and pay on the vehicle, around $179 per month, but in it's current condition, she's getting afraid to drive it. We have agreed to loan her our car, and she's going to stop paying on her car. Another twist. We are in Illinois and she is in PA. The car loan is through People's First Credit Union. She already told us that she really can't even afford the $179 and can really only afford $150. I personally can't see how she can afford any at all, but that's another story.

Originally, the thought process was for us to get a different car to replace the car we were loaning her, but that's putting financial strain on us (we were discharged from our own bk7 a little over a year ago) and I'm not certain we can get a loan on a used car without a crappy interest rate.

How does the repossession take place? Can we in theory, swap cars with her, have her keep up her registration and insurance on her car, and drive her car until they find it in Illinois and repo it? Are there any ramifications to this? We know we will need to get a different car, but we'd rather not be pressured into getting it right now.

Any advice would be appreciated.

Thanks,

[justbroke]

I'm am not a Florida repossession expert and definitely not one for Illinois or Pennsylvania. In some States, hiding a car for the purposes of hindering a lienholder from executing a repossession could be criminal. I would look to Pennsylvania law on this topic.

Having wrote that, and now speaking hypothetically, I suppose you could use your mom's car until the bank or repo man asks or demands that your mother makes it available for repossession. At the point where you know or have been informed that the bank is seeking to enforce its lien (by repossession or writ), then you would need to surrender the vehicle. I don't know what this buys you in the long term.

I am so glad that judge did not "officially" reaffirm the debt (thus allowing a ride through). An underwater vehicle should never be reaffirmed and this is a good example or why it is not worth it. Your mother can walk away from this current car, but I do see that she would need another vehicle. I can't tell you what to do or that a (technical) hindering the repossession is the right thing to do. I know that you are looking for answers, but I have none.

I may had, prior to the discharge being entered, recommended a redemption for market value ($4K) with a 5 year refinance. Even at 18% from 722 Redemption (USBank), the payments would have been about $100/month. Even so, this mechanical issue would have surfaced and then I would have wished that I mentioned not redeeming! Unfortunately, this is a scenario that plays out more often than we care to notice. Your mother is between a rock and a hard place, and so are you. Please act responsibly -- financially -- and I hope all works out for you.

[ld2366eh]

Thanks, JustBroke! I sure wish I knew about that redemption option before. As much reading as I had done on here, I had never come across that option. Oh well, too late to think about that now. BTW, we are certainly not going to try to hide the car here in Illinois. That never crossed my mind. I just wanted to buy some time until we have to get another car. I was thinking we could drive it back here (and save money on renting a car to get back to Illinois), then having her stop paying and telling them where they could come to pick it up. I figured it might buy us a month. Would we need to bring it back to PA? (That kind of defeats my purpose.) Thanks again!