Anyone do 722 Redemption on car?

[badkarma]

After our 341 meeting today, which went very well... our lawyer asked about a 722 Redemption on our car since we owe more then it's worth?
How does that work exactlly?
Thanks

[BKdinOhio]

722 Redemption allows you to get a loan to keep your car based on the value of the car.

What happened with us is that 722 came up with a value. When we submitted this to the court our lender challenged it, saying it was worth more.

We didn't agree with our lenders value and told them we were prepared to surrender the our vehicle. They ended up coming back with a value $500 more than what 722 came up with. We agreed with this and 722 agreed to fund the additional money.

Our lender removed the lien on the vehicle. We were upside down over 5000 on our car and are paying a lot less than what we had been paying.

Yes we'll be paying high interest but it should help rebuild our credit overall.

[badkarma]

Hi we are also in Ohio
say we have 3 yrs left on our loan and we owe 12000 and Suv is valued at 8500
so taking out this 722 Rep is the new loan still for the remaining 3 yrs for the 8500 if org lender agrees to 8500 value or does it start back at 5 yr loan again?
thanks

[tigergem]

The interest rate on a 722 loan from US Bank was something like 24% when I called to ask before I filed my chapter 13. The payment on my pricey widget would have cost me more per month than my Chapter 13 payment, but that was how I decided to file 13 instead of Chapter 7.

[badkarma]

tigerem so was your payment less then org car loan then?
we what to know if payments are less then org loan amount? and if the term is longer then what is left on loan?

[tigergem]

Well. It wasn't a car loan. It's a different type of vehicle, and the loan for it was not standard to begin with. I had a 15 year term at 19.95% My payments were originally $600+ per month, but I paid more ... $700+ to try to pay down the principal faster. Well, at least for the first couple of years, that is how it worked out. Then life happened.

Under 722 they would have done a valuation on it so, yeah a lot less than my current 50k+ balance. But at 24%. I reckon if I had filed ch 7, a 722 would have cut my payments to less than half of the original loan payments. But that would depend on what they could negotiate as valuation with the lender. I doubt it would have been as good as what I got under my Chapter 13 cram down. I think I figured out that IF they got the same valuation as I asked for under my Ch 13, the payments for 5 years would have been something like $260.00.

Under my chapter 13 plan I crammed it down to under 10k at 3.5% My plan payments are only $226 per month, and that includes payment to a $2500 IRS bill I got just before I filed. I think something like $164 of the plan payment is for the vehicle. I got a pretty good deal.