Whats the timeline like for surrendering a vehicle in Ch 7? How long after discharge?

[Anonymous]

I plan to ask this to my attorney when I meet with her next week, but I was hoping some people could post their experiences (I know it won't be the same for everyone).

We are considering surrendering our (fully current) upside down vehicles when we file Ch 7. Due to work/kids, we will need to replace both ASAP - there cannot be a gap in time where we do not have 2 vehicles. I guess what I'm wondering is... when we file and state that we intend to surrender, will we be able to keep the cars until we are discharged? We will continue to pay the monthly notes. We obviously cannot get into new debt or purchase new cars until we are discharged. And even then, we will probably need time to clean up our credit reports before we can get financing on replacement vehicles.

Feel free to post your time line as far as when you filed, when you discharged, and when you ultimately surrendered the vehicle. Also curious about what kind of financing you were able to get immediately post-BK.

Thanks in advance!

[Anonymous]

You can"t make payments on the cars unless you reaffirm the debt with the creditor. I just got discharge today, and the creditor picking up my car Friday. I didnt sign a reaffirmation, because my attorney said if I sign it when my discharge granted I will be responsible for the debt and it will not be discharge. So it a desicion you have to make.

[Anonymous]

I filed a chapter 13 then converted to a chapter 7. file 4-04-14 converted 2-25-15 discharge 6-16-15. I clean up my report while waiting on my discharge, also attain two credit cards (1) secure Opensky and a Discover secure. Only baddie I'm waiting on to clear up Is the car loan to update IIB. So now I'm waiting also to get another car. Its take time, I dont want no high APR%. Parnets let me use their ride.

[CH-7-Mission-Accomplished]

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@Anonymous wrote:

You can"t make payments on the cars unless you reaffirm the debt with the creditor. I just got discharge today, and the creditor picking up my car Friday. I didnt sign a reaffirmation, because my attorney said if I sign it when my discharge granted I will be responsible for the debt and it will not be discharge. So it a desicion you have to make.

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This actually isn't true.  You can keep making payments on the car without reaffirming.  Most lenders would love you to do ths and pay it off.  Then they give you the title.  They just can't do anything about it except repo the car if you stop paying.

I did this with my car.  I just kept on paying (with attorney's advice) until the loan was paid in full with Cap 1.

[Anonymous]

I filled 2-26-15 had my 341 meeting 4-6-15 they came and towed my car(without telling me) 6-4-15 and I was discharged 6-10-15. I've heard people say they got a car within a month. I'm going to wait. Also I wouldn't suggest reaffirming. If you still pay on it most of the time they won't pick it up but can't send you a bill either. It will still say IIB on you credit reports.

[Anonymous]

Well my attorney stated to me stop making payments if Im not going keep the car. The car people can get it anytime even if you still making payments because you didnt reaffim. So he said that money I could be losing out on. If you miss one payments or dont pay what they ask you too, they can do whatever. Debt was included in Bankruptcy. Different strokes for different folks. Are however you say it. YMMV.

[Anonymous]

. MY question,  Why would you keep paying on it? Save that money for down payment on a new one.

[Anonymous]

I would only keep making payments if it would allow me time to clean up my report and prepare to purchase a replacement vehicle. Since I cannot be without the vehicles, I would basically be "renting them" by keeping them current, until I replace them.

Can a credit union force me to either reaffirm or surrender? Or is there nothing they can do to stop me from NOT reaffirming but continuing to pay so that they can't repo?

[DaveInAZ]

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@Anonymous wrote:

I would only keep making payments if it would allow me time to clean up my report and prepare to purchase a replacement vehicle. Since I cannot be without the vehicles, I would basically be "renting them" by keeping them current, until I replace them.

Can a credit union force me to either reaffirm or surrender? Or is there nothing they can do to stop me from NOT reaffirming but continuing to pay so that they can't repo?

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While many lenders are happy to let you keep the car if you don't reaffirm but stay current on the payments some just wont' let you keep the car unless you reaffirm, and unfortunately credit unions are often the toughest lenders and will repo the car even if you are current on payments but don't reaffirm. All they need to do is put a clause in the loan agreement that filing for BK is an automatic default on the loan, and that automatic default allows them to repo, even before your discharge. All they need to do is file a motion to the court to lift the automatic stay and allow them to repo, and if you file with intent to surrender the court will usually allow them to do that. You shouldn't count on keepig the vehicles until after discharge and you have time to clean your CR in hopes of getting a less awful rate on a new loan.

[beezer32]

DaveInAZ is spot on!

My advice; Don't make anymore payments towards your vehicles. You do not need to 'rent' them or buy time long enough to clean up credit reports. The day you file your petition you are protected by Automatic Stay. The lien holder cannot and will not repossess the vehicles following that date until either:

• You expressly instruct them to come and get it with a surrender statement from your attorney.
• You are fully discharged.
• The lein holder files a motion for 'relief of stay'.

There may be other circumstances that would allow you to physically lose the vehicles but I am unaware. For the most part, once you file, they cannot call, collect, repossess or even whisper your name in their dreams. Stop making payments after you file your petition. Use that money to save up down payments for other vehicle loans post discharge.

For myself, I filed 2/26, Meeting 4/6 (lien holder did not show up), I surrendered my car to the lien holder on 5/25 and I was discharged on 6/15. The only reason the lein holder was permitted to pick the car up is because I didn't need or want it and I instructed my attorney to have them pick it up. All situations will vary but the automatic stay is the same unless a motion for relief is granted to the creditor.