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Filing Ch7, what to do about a car?

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Filing Ch7, what to do about a car?

I have been lurking on the boards for forever, but this is my first post. So here goes.......

 

I will be filing Ch 7 BK in the next week or so. I have an auto loan that is currently at 200% of the car's value so it makes absolutely no sense to reaffirm it. My lawyer is of the opinion that the judge would not even approve a reaffirmation. Drive through is not an option due to the finance company's policies. So that leaves me basically in the situation of having to surrender the car.

 

The issue is, I need something to drive. I live in a very rural area, and work is 30 miles away.

I need opinions on what to do. I have heard that there are finance companies that will deal with you one day after discharge, but I don't want to run up a bunch of inqiries trying to get a new loan.

 

My questions are:

 

1. When does the lender usually repo the car once BK is filed? In other words, how much time have I got?

 

2. Any suggestions for lenders that would be willing to work with me straight out of a BK? My scores right now are 496-520, with one previous repo that was a co-sign with my ex husband. He got it in the divorce and quit paying.

 

3. Am I missing anything? Any other options in this situation?

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SoulMaster
Established Contributor

Re: Filing Ch7, what to do about a car?

Answering Q3 first.... While I'm not an expert on them; you should try researching something called a 721 redemption.  Theoretically, it lowers the balance to the auction value of a vehicle.  I've never seen one done, but I know they're out there.  If your google-fu is strong, I'm sure you can find out more.

 

On the other hand, I hate auto loans (they are second only to my loathing of student loans). In most cities it's fairly easy to find a relatively reliable car for between $500 and $1000.  It might be a better bet to let yours go and pick up something to "get you by" until you can pay cash for a $2000 car (remember, cheap cars have cheaper insurance and don't lose much value).  It's the Dave Ramsey car-buying plan.

 

Your scores right now are more worthless than normal.  As soon as your BK is discharged and your CRs are right, you'll get a pop.

 

To answer question 1... usually a month or so after discharge, but it varys by state.  Ask your laywer.

 

-SM

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
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Re: Filing Ch7, what to do about a car?

Awesome, thanks!

According to Kelly blue book, the trade in value on my car is about $4500...

That's close to what I would be expected to pay for a redemption, right?
Message 3 of 5
SoulMaster
Established Contributor

Re: Filing Ch7, what to do about a car?

<shrug>  /me = no experience w/ 721, I just know they exist.

 

If you do one, maybe you can write a thread.

 

-SM

I am not an attorney and none of what I write should be construed as legal advice. For legal advice please consult an attorney.

Starting Score: ~470 preBK(8/2010)
Current Scores as of Late January 2016 All 700+. Last CR pull from a lender(housing) was mid-score 749.
Goal Score: 700+ - reached.
Message 4 of 5
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Re: Filing Ch7, what to do about a car?

Well, just got off the phone with the paralegal. Apparently a 722 is a viable option for me. I'm going to give it a go, I will post an update after the dust settles.
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