What to do when i chose not to reaff my vehicle but have nothing else to drive

[Natalierae]

Hi my name is Natalie and am going absolutely crazy trying to figure out what to do with my current car. I have talked to my attorney and have been looking on line with no success. I am currently filling a chapter 7 bankruptcy. My husband and i 8 months ago purchased a used vehicle for 16,000. The vehicle broke down after 3 days and since the contract was as-is we werent able to get out of it. So my husband and i made a dumb desisin of purchasing a brand new truck for 50,000 and letting the vehicle go. At this point we were planning of filing bankruptcy for all our credit cards and other truck (since we didnt want our wages garnished) and keeping the very expensive 940.00 a month truck payment. My attorney tryed to file a claim against the dealership at first to see if he could get out of the vehicle loan. But there was no sucess. Now i am filing my chapter 7 and have my very expensive truck that my attorney does not recommend at all to keep. We tryed to look into not signing the reaff agreement on it and just keeping it until i couldnt since i would just be able to give them there keys back and walking away if something wore to happen but unfortunately chrystler capital does not allow you to do that. I use that truck every day to get to work and back and i have no back up plan. My husband is a boat machanic so he also needs a truck so though i may be able to get into a vehcile in the 13,000 price range. That seems to be the cheapest that will fit our needs. I dont have any spare cash to pay out right. What do i do? I would love everyones opinion on this.

[bcohen]

This really isn't rocket science. Unless you are earning a 6-figure income, or have zero other living expenses (i.e. you don't pay rent or mortgage), you can't afford the $940 a month truck payment. The loan payment isn't even the entire cost of ownership for the truck. There's also full-coverage insurance, GAP insurance, maintenance and repair costs, etc. To put this in perspective, the rent on a typical 2-bedroom apartment here is around $800 a month, and the monthly mortgage payment on a $130,000 house is around $750 a month.

The smart thing to do is to stop paying on the loan right before you file, so that at the time you file, you are less than 30 days past due, so the lender won't repossess. Then, once you file, you put something other than "surrender" on the Statement of Intentions, so that the lender would be required to file for relief from the automatic stay if they wish to take the truck while the case is still open. For example, you could put "redeem". (If you put "surrender" then the lender can use that as proof you don't plan to keep the truck, and can obtain relief from the stay immediately, which you don't want.)

While the bankruptcy is open, the automatic stay will prevent the lender from repossessing your truck, allowing you to keep driving it payment-free for 2 to 3 months, maybe more. If you set the money which you are not paying toward the truck loan each month, then by the time it is eventually taken away, you should have $3,000 or more saved up--enough to buy a decent used vehicle without any loan.

[LadyInTheRed]

Even where I live where you are lucky if you can find a 1 bedroom apartment for $1500 or a house that isn't a fixer upper for $350,000, $940 is a big truck payment!

bcohen gives good advice. However, it is my understanding that if you default on the loan, you have to follow up on your stated intention within a certain amount of time (30 to 45 days after your 341 I believe). If you don't the lender can repo without getting relief from the stay. But, I don't think that is very common. Most wait until after the case is closed. Ask your attorney about this to confirm. You should still stop making those payments. Just be prepared for a possibility that a repo can happen before the case closes.