Fair Market Value On Car?

[MISSE]

I DONT UNDERSTAND THIS. I FILED CHAPTER 7 AND MY HEARING IS SOON. I OWE 8500 ON MY CAR ITS ONLY WORTH 4000. I CALLED MY ATTORNEY AND THEY SAID I STILL OWE THE AMOUNT ON THE LOAN. I THOUGHT THEY GO BY FAIR MARKET VALUE?

[herekitty]

Are you reaffirming your loan? If so, yes you have to pay.

I'm not positive on how this works - but if you're turning it over you are still responsible for the amount left over. HHM or Todd could probably answer that part better.

[MISSE]

I Dont Think I Re-affirmed It.

[herekitty]

are you keeping it?

[MISSE]

Yes Im Keeping It

[herekitty]

I believe your loan had to be reaffirmed then, which means you are responsible for the original loan amount taken out.

The information below is from utahbankruptcy.com and I found similiar information on an Indiana website. Hope it helps!

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KEEPING YOUR VEHICLE - If you are in the process of purchasing a vehicle and want to retain possession of your vehicle, you can still file a Chapter 7 bankruptcy, eliminate as much of your other debt as possible, and retain possession of your vehicle. You cannot eliminate the debt against your vehicle, however, as Creditors who finance automobiles generally retain title to the vehicle until it is paid in full. You have three options if you desire to retain any vehicle you are in the process of paying for:

1. STAY CURRENT: As long as you are current in payments on your vehicle, the Creditor providing the financing for your vehicle cannot repossess it. Therefore, you can file bankruptcy and simply continue to make the monthly installments against your vehicle on terms (including monthly payment and interest rate) originally agreed to with the Creditor.

2. REAFFIRM: You can execute a new agreement with the car Creditor under the terms of which you agree in writing to continue to make payments to the Creditor. Depending on the Creditor, the Creditor may agree to reduce the balance owing on your car and/or the interest rate to induce you to execute a reaffirmation agreement.

3. REDEEM: You have the absolute right in bankruptcy to purchase your vehicle for fair market value from the Creditor who is financing your vehicle. For example, if the fair market value of your vehicle is only $3,000.00 and you owe $6,000.00 on it, you can acquire it from the creditor for $3,000.00 if you can come up with the cash to purchase it. There is no bankruptcy mechanism in Chapter 7 to force the car creditor to finance the redemption. You may be able to borrow funds to redeem a vehicle and certain lending institutions market to provide financing to individuals in bankruptcy who desire to redeem their vehicles. The interest rates tend to be high however (about 21%).

[herekitty]

Perhaps option #3 would be the best, but I'm going to assume that because you filed CH 7 you don't have the money to pay off the car in a lump sum and if interest rates are that high - you'd probably be paying close to the amount of your car payment now.

[MISSE]

Well That Sucks. I Would Let Them Repo It But My Dad Is A Co-signer And I Dont Want To Mess His Credit Up

[herekitty]

Oh - cosigner, you hadn't mentioned that. Three isn't an option then, because they would go after him for the full amount. So they don't screw up his credit, your lawyer is right - you'll have to pay it all back to keep the vehicle. (going thru the same thing with my vehicle)