What happens? We weren't far enough along in payments to do a cram down. You must have purchased the vehicle and taken out the loan at least 910 days (approximately two and a half years) before filing the bankruptcy.
One year until chapter 13, my car is dying. Transmission, rack and pinion. 2010 highlander with 175k miles. We want to surrender. Currently paying $372 a month outside the plan but at 1.5 payments behind the lender has sent a motion to be able to take the car. We just want to send it back and buy a used minivan with cash from a 401k loan, attorney isn't really saying much other than they can come after us for the balance owed (12k currently) after what it goes for at an auto auction. Will they do that if we are in an active 13?!? I don't want to tick the trustee off either.
Welcome to the forums. Since you kept the vehicle out of the Chapter 13 and didnt include it in the state you live in which is allowed probably. You have spoken to your attorney already it seems. Not to blow you off. They know every detail of your case. And what lies ahead if they do come and get the SUV. Good Luck!
Paying a vehicle outside the Plan does not necessarily mean the lender, once the stay is lifted and the vehicle is disposed of, can go after you for the deficiency after you complete your Chapter 13. The lender will have the right to amend its Proof of Claim from secured to unsecured and participate in any distribution made to unsecured creditors.
The first thing you should do is look at the last paragraph of the Motion to Lift the Automatic Stay. It will start with the words like, “Wherefore, Movant requests this court. . .”. What is the lender asking for? My guess, it is asking to take back its property so that it can dispose of it pursuant to State law. There most likely is nothing in the Motion that says “and go after the debtor for the balance outside of the bankruptcy”.
Please note, 11 USC 1328(a), in part, states that upon completion of the Plan the debtor gets a discharge of all debts except for those provided for under §1322(b)(5). In turn, 1322(b)(5) provides that a Plan may, “provide for the curing of any default within a reasonable time and maintenance of payments while the case is pending on any unsecured claim or secured claim on which the last payment is due after the date on which the final payment under the plan is due”.
Therefore, unless the secured vehicle loan’s last payment, pursuant to its contract terms, falls due after your last scheduled Plan payment, the deficiency claim is subject to the continued automatic stay and, if you complete the Chapter 13 (or convert to a 7) will be subject to your discharge.
If you are subject to the terms of 1328 and 1322 as referenced above, the simple solution is to file a Modified Plan that provides for the surrender of the vehicle.
This is not rocket science. Please, go back to your attny and get in writing what the creditor can and cannot do once it takes back the vehicle and whether or not a Modified Plan is justified.
So attorney is still radio silence for now, but we did decide we will just surrender the vehicle. This is the last paragraph, thank you for your advice. I think we will be ok...
"WHEREFORE, movant prays for an Order terminating the §362 stay, notwithstanding
B.R. 4001(a)(3), and abandonment, and authorizing the Debtor to surrender possession of the
2010 Toyota Highlander motor vehicle to movant. Movant requests that the automatic stay be
further terminated to allow the movant to send to the Debtor any and all notices required by state
and/or federal law, regulation or statute, and requests that any issues relating thereto be
adjudicated at the first hearing held on this Motion."