722 Redemption Loan

[cathywhite4495]

I keep getting letters from companies doing 722 redemption loans. They all say stuff about working with your attorney blah blah. Does anybody know if you can do one of these loans if you filed pro se? I've googled and looked in my books but can't find the answer to this. I'm currently upside down by about $500 (not too bad) and have a 22.5% interest rate through roadloans. I've been paying for 18 months and only paid $1600 of the principle. I'm thinking I could get a lower rate if I did one of these loans and then I could get it paid off faster. I've considered getting a beater but I have to drive a half hour each way to work, I'm a single mom, and we live in the frozen North where we don't have public transportation so I would be in trouble if I broke down. I have the reaffirmation agreement in my hands and I need to make a decision soon.
Thanks

[songbird81]

I believe those 722 loans are generally 24-25%. I've read about several people getting Capital One blank check loans for 10-15% after discharge, although I don't know if that's only for purchase or if it applies to refinancing as well.

[SinkingFast]

To the best of my knowledge, only 1 person here has done a 722 car purchase. And that Member does not post here any more.

As with many things,.......... People think about BK, find the Forum, post for a bit while they file, and then move on with life.

StaciMM bought a car that way. The 722 Lender they dealt with had an inventory of cars to select from. They never actually saw the car, live and in person, prior to taking delivery. Something like the car was in Ohio and they lived in Georgia kind of thing.

Staci filed Pro Se and they were able to negotiate the 722 Redemption deal themselves. Here's the thread where she talked about it:

http://www.bkforum.com/showthread.php?t=6230

[poorme]

If you have a reaffirmation agreement signed by your lender, you wind up with essentially same as a 722 loan - a court approved loan that is outside the protection of your bankruptcy stay.

Another way the 722's operate is to enable you to "pay off" your loan to current lender at a reduced payoff amount, e.g. trade-in or wholesale price, and they will finance that for you, court approved. In theory, the lender should be happy to get that and not have to repo and then auction the car in unknown condition, where they might lose even more money. Can be a good deal for folks who want to keep their car. In some cases, the hi-interest loan might have a lower payment based on the reduced loan amount. It's up to the current lender to agree to accept that payoff amount, though.

If your payment history is good with current lender, you may be better off keeping the car thru reaffirmation. You're not that much upside down, and could more easily roll that into a trade-in deal. Good luck.

[CityGirl]

In my situation, I'm 13K upside down at 7% interest but since I've got a good payment history, I know they wouldn't take the deal.
It would be cheaper for me though even at 25% because I'd only pay $18K instead of 29K and my payment would be about $140 less...but I know my current lender wouldn't go for it.