Please explain, and talk s l o w l y.....

[teresa]

I've always thought I was smarter than the average bear, but I just don't GET THIS!!!

Someone please explain, under the new laws, what I would pay for in CH 13 BK on my cars if I give them up. I'm not even going to tell you what I thought, too embarrassed, I just don't get it. OK, if I just surrender my cars, which I am making payments on, and they are included in the BK, and I'm paying 100% repay, what am I paying on my vehicles? I don't mean $$, I mean, what can they charge me for? The principle amount of the loan? The difference between the actual value and....what? It doesn't make sense to me to surrender the cars, AND have to pay for them. Please explain....please

[SinkingFast]

If you surrender them aren't you no longer responsible for them at all?? That's what would happen in Ch 7. The Lender would get the car back and that would be that. Ch 13 is supposed to be structured so that Creditors get at least as much as they would in Ch 7.

Maybe a more knowledgeable Ch 13 person will chime in here.

But it doesn't make sense to me that you should pay, in you plan payments, for vehicles that you surrender.

[13inOR]

It would sure seem like surrendering them would make you not responsible for any of it.
I was old law, and kept my cars so I sure can't say for sure but what I do know is that in a chapter 13, they can't charge more than the KBB value even if you owe far more. But thats IF you are keeping the car and paying for it thru your chapter 13.
It really does make no sense that you would have to pay anything at all for a surrendered vehicle. I agree with SF on that one.

[moochie]

I surrendered a car in my chapter 13. I owed around $8000 on it. The bank that held the car note is listed as a unsecured creditor, but the amount is still the same. My plan is set at 10%, so they will get around $800. It seems whatever the car sold for at auction that should at least be deducted from the total amount. Mine was filed under the old law. If this is the way it's done, and you are paying 100%, you may still pay for the car. I would reconsider surrendering the cars. I that is one thing that I regret doing.

[Minnymouth]

If you are surrendering the vehicle then the debt is discharged in bankruptcy.

In Chapter 7 you would owe nothing, debt is completely discharged.

In Chapter 13 the debt is discharged, but the creditor may be able to file a claim on the difference between what you owe on the vehicle and what they sell it for. They could file a claim for the $$$$ difference only as they are a secured creditor also. However, most don't file because it cost them more than they would get back....

Hope this helps....