Please Help Me

[Denmarie]

My husband and I were discharged from CH 7 in December. We did not reaffirm on our car loan with Beneficial. We have a 2003 Protege and owe $11,000. Since we did not reaffirm, Beneficial will not send us a statement of the 7 payments we've made at $334 each. When I talked to them on the phone they said we have to call everytime we want to know our balance. Also, the Pay-off is the same amount as the current balance, so even if we paid them off tomorrow we would have to pay all that finance charge for when we would have made all the payments, if that makes sense.
My question is this. Is this legal what they're doing?
What if we traded our car in for another one and paid Beneficial off and got them out of our hair, and how hard would it be to go and buy another car with the bankruptcy being so fresh?

[Bronte]

Denmarie,
If you listed this car in your bankruptcy filings and did not reaffirm then I believe the company is under no obligation to notify the credit bureaus of your payments. I reaffirmed my car debt so my payments would show as a positive trade line.

If you discharged this car under bankruptcy I don't believe you can trade it in on another car as you do not owe it Benefical does.


You may want to check with local dealers about financing another car and them surrendering your old car to Benefical. Many dealers will turn you down or try to charge high interest rates. I have heard that Ford is very bankruptcy friendly so you may want to look into what they can offer you. You may want to contact your lawyer on this as they may have knowledge of a car dealer that can help you.

[LostinMi]

I did not reaffirm my auto loan with GMAC. I plan to keep it and continue making payments. My discharge was about a month ago, I just called GMAC to find out when I would start getting bills again and was informed that legally they could not send me a bill since the debt was discharged in BK. So, I will continue to make copies of an old bill to use to send my monthly payments in. To get the payoff amount -- I too must call to find out what it is whenever I want to know.

I am not sure you are understanding the payoff correctly though. If you pay it off today and it's $11,000 because that is the current payoff, but if you pay it off over the life of the loan you will have accured more interest and pay more over the long run. Does that make sense?

[SinkingFast]

I think I understand now.

If we could pay off my auto loan today, we'd pay $11,500 in one lump sum. But if we continue to make payments as agreed over the remaining life of the note, we'll pay $13,205. If we could pay-off right now, we'd save about $2K in interest payments.

In your case, Beneficial is saying the amount you owe/would have to pay is the same regardless. Whether you pay in full in one lump sum or continue making payments, Beneficial wants the same amount of money. $11,000 either way.

That doesn't seem right.

Definitely no incentive to pay off in one lump sum to own the car outright. And since you aren't going to get credit on your Credit Reports for making payments to Beneficial, there's not much incentive to keep making payments either. Since you did not reaffirm, if you're ever late with the payments, Beneficial can repo the car at any time.

Bronte had a good suggestion. Shop around. See what kind of interest rates you can get, what kinds of deals are available to you, get your financing and such lined up on a new car first. Have all your ducks in a row. Maybe even wait until you sign the papers for the new car so you are absolutely sure the dealer is going thru with it. Then call Beneficial and arrange to turn their car into them.

Another thought for you,.......... It won't be long and car dealers will be starting the push to get rid of '06's. The summer promotions will start up in May. Maybe if you can't find a decent deal now, car dealers may be more flexible in a couple of months when they are looking to clear their lots for new inventory that's coming. Also, shopping toward the end of the month helps get you better deals. Dealers tend to give a little more near the end of the month to meet monthly sales quotas or goals.

[StaciMM]

What is the car worth? If you owe more than it is worth, then keep making payments for a few months and work on cleaning up your credit. Then try to buy a used car, you don't have to 'pay off' the Protege-you can just give it back.

If it is worth ~$11,000 or more, then it does seem questionable that they are saying your payoff amount (after interest) is the same later as now. See if you can talk to a supervisor.

Since the debt was discharged, they cannot/will not send statements. Keep good records of all your payments.

[edwards2]

Okay I dont get this. You did not reaffirm on the vehicle but if you continue making payments you are okay as far as keeping it. If you default the company can and will repossess the vehicle but will not sue you for the difference because you didnt reaffirm the loan? The advantage of reaffirming a vehicle is you continue to get statements and they do report your payments to the credit bureaus. But if you see you can no longer make the payments and you find another vehicle you should just let the company repossess the vehicle and then go buy another car? Why would a dealership sell you a car under those circumstances BK notwithstanding? Ford Motor Credit pretty much told my husband they looked at the way we paid our car notes even given the fact we filed BK so why would a car dealer sell a car to someone who just had it repossessed? The fly in the ointment for us was we were not upside down on my car and in fact we paid it off during the BK process but my husband's car(at the time) probably would have allowed us to just break even.