Lender filed relief from stay

[Hopefull1983]

So I was planning on keeping my car until my Chapter 7 BK discharges in Feb and then finance something. Unfortunately, the lender has filed a relief from the stay and has the hearing on Feb. 4th. From what I read it seems as though the court will approve this relief so it would be a waste of time for me to even attend the hearing. What should I do now? I need a car and I'm sure no one will finance me before my BK discharges. Any help would be appreciated.

[bcohen]

Of course, you can go to the hearing and argue your case before the judge. If you did not put "surrender" on your Statement of Intentions, you can argue in court that you are saving up money to bring the loan current again (even if that is a lie) or that you are planning to do a Redemption refinance (again, even if that is a lie). In that case, the judge will probable NOT allow for the stay to be lifted, so you can keep driving the car payment-free until your discharge is granted, at which point the auto-stay ends.

If you did put "surrender" then you don't really have a leg to stand on, because the attorney for the finance company will argue that since you have indicated that you are surrendering the collateral, they are entitled to have the stay lifted as a matter of law, and the judge will approve it.

[Hopefull1983]

Of course, you can go to the hearing and argue your case before the judge. If you did not put "surrender" on your Statement of Intentions, you can argue in court that you are saving up money to bring the loan current again (even if that is a lie) or that you are planning to do a Redemption refinance (again, even if that is a lie). In that case, the judge will probable NOT allow for the stay to be lifted, so you can keep driving the car payment-free until your discharge is granted, at which point the auto-stay ends.

If you did put "surrender" then you don't really have a leg to stand on, because the attorney for the finance company will argue that since you have indicated that you are surrendering the collateral, they are entitled to have the stay lifted as a matter of law, and the judge will approve it.

My intentions on the schedule were to reaffirm but the lender won't agree to reaffirm. Their court document says they want to lift the stay because of the negative equity in the car and how they are trying to protect their financial interest. I have full coverage on the insurance so they shouldn't have to worry. So I should show up to the hearing and tell them I'm trying to save which is true! You really think the judge will accept that?

[bcohen]

Yes, since your intention was not to surrender, you can reasonably argue that you are attempting to save up money to bring the loan current, and/or to put down towards a redemption loan on the vehicle. The lender's attorney cannot prove otherwise, and the judge will generally give the debtor (you) the benefit of the doubt. You might as well show up and contest this attempt to lift the stay, so you can drive the car for another month while you (hopefully) save up for a down payment to buy something else.

[Pjmax]

If your Bk is due to discharge in Feb., it's only a few weeks either way. Since you know you aren't keeping the car, take your savings and buy a beater to get you through.

[AngelinaCat]

Understand that right after your discharge, it is extremely unlikely that anyone other than a 'Tony Soprano' type of loan shark goon is going to finance you. And your interest rates will be extreme.

Why not do a search through the forum for information on a '722 Redemption'. Here is a link to a list of threads containing those search terms:

http://www.bkforum.com/search.php?searchid=2175116

Good luck!

[Hopefull1983]

Understand that right after your discharge, it is extremely unlikely that anyone other than a 'Tony Soprano' type of loan shark goon is going to finance you. And your interest rates will be extreme.

Why not do a search through the forum for information on a '722 Redemption'. Here is a link to a list of threads containing those search terms:

http://www.bkforum.com/search.php?searchid=2175116

Good luck!

Wow what a surprise. I emailed the lender with some questions and they emailed back with a reaffirmation agreement! They're going to reduce the loan balance to 10k over 60 months at 8%!!! The car is a 2008 and this will give the car a considerable amount of equity now and the payments are super reasonable. Wow what a great surprise. They said the judge may or may not approve the agreement but they will still allow me to ride thru. I don't see why the judge wouldn't approve it because there is no way I'll find a better deal than that. I can't believe they knocked off over 6k from the balance. Amazing! I'm going to send in the agreement and attend the hearing once the court schedules it. I'll update once that happens.

[AngelinaCat]

That is GREAT!

[keepmine]

Wow what a surprise. I emailed the lender with some questions and they emailed back with a reaffirmation agreement! They're going to reduce the loan balance to 10k over 60 months at 8%!!! The car is a 2008 and this will give the car a considerable amount of equity now and the payments are super reasonable. Wow what a great surprise. They said the judge may or may not approve the agreement but they will still allow me to ride thru. I don't see why the judge wouldn't approve it because there is no way I'll find a better deal than that. I can't believe they knocked off over 6k from the balance. Amazing! I'm going to send in the agreement and attend the hearing once the court schedules it. I'll update once that happens.

The judge does not care what sort of deal you have. He/she is only interested in, is this in your best interest. Since you'll be on the hook for any deficiency balance should you default, many judges rouinely refuse to approve these agreements.
As an aside, you're in the 9th circuit and it's ruled that all the bk code requires is, you attempt to reaffirm. You don't have to have the agreement approved.
At that point, you are allowed to ride through.
Looks like you are in a really good spot!

[Pjmax]

Wow, that's really great news!

[Hopefull1983]

The judge does not care what sort of deal you have. He/she is only interested in, is this in your best interest. Since you'll be on the hook for any deficiency balance should you default, many judges rouinely refuse to approve these agreements.
As an aside, you're in the 9th circuit and it's ruled that all the bk code requires is, you attempt to reaffirm. You don't have to have the agreement approved.
At that point, you are allowed to ride through.
Looks like you are in a really good spot!

The judge does not care what sort of deal you have. He/she is only interested in, is this in your best interest. Since you'll be on the hook for any deficiency balance should you default, many judges rouinely refuse to approve these agreements.
As an aside, you're in the 9th circuit and it's ruled that all the bk code requires is, you attempt to reaffirm. You don't have to have the agreement approved.
At that point, you are allowed to ride through.
Looks like you are in a really good spot!

I can understand that. The judge wants to make sure there is no undue hardship. The only thing that concerns me is that with this new payment amount my schedule of expenses breaks even at just over $10 cash left over. With the original payment I was negative on the schedules. I'm afraid the judge may think this is too close and won't approve. The affirmation agreement has an optional section for the judge to consider why this affirmation is in my best interest. What should I write there?

[keepmine]

Honestly, there is really no good reason for you to reaffirm.

[Hopefull1983]

Honestly, there is really no good reason for you to reaffirm.

I figure that this is best because I need a car no matter what. I won't have enough money for a clunker for a while. The car I'm planning on reaffirming is in great condition and gets great mpg all of which a clunker won't get. Lastly I doubt I'll get any reasonable financing so 10k over 60 months at 8% seems pretty darn good.

[bcohen]

Honestly, there is really no good reason for you to reaffirm.

If the lender is willing to "cram down" the principal to the car's present value, in exchange for a reaffirmation agreement, then that's a very good reason to reaffirm (if you can afford to)! That being said, all the law requires is that you make an effort to reaffirm. If the judge denies the reaffirmation agreement (and they usually do) then you will still receive the benefits of the agreement without any of the risk.

[Hopefull1983]

Interesting couple of recent events. The lender called me and said they are removing the motion for relief of automatic stay. The lady was super nice and said that shell be on the phone when I attend the affirmation hearing so if the judge has questions she can answer them. She said they judge should approve my agreement because of the very favorable terms they adjusted the loan to. She mentioned I needed to file my financial management certificate so that she could file the removal of the motion for the stay. All very interesting. This lender really doesn't want the car back lol. I'm happy to keep it now because of the reduction in balance and low rate