Will Carmax repossess if current on payments when filing a Chapter 7?

[wikkibird]

Hi everyone! This is my first post and while I can't say that I'm happy to be here, I've been doing a lot of reading and you all have helped me answer a TON of questions already and I appreciate each and every one of you for that!

So, here's my issue (the first of many, I'm sure): We were planning to file Chapter 13 today, but it got bumped to Tuesday because the paralegal had to run to the ER with stomach pain RIGHT BEFORE WE GOT THERE. *insert panic attack here* Hope he's okay, but the timing couldn't be worse. The only reason we switched to a 13 is because we are ONE payment behind with Carmax and stupid us didn't close bank accounts, so one creditor got a bank levy on us and yanked $1000 out of there (and so the Trustee would see that as a preferential payment--nevermind we didn't agree to it). In a 13, the car wouldn't be repossessed (being one month behind) and we could roll the $1000 taken into the payment plan. Our lawyer was concerned that if we did Chapter 7 because we are one month behind, Carmax might want to take the car.

Now, we had a whole value life insurance that we were told to cash out or it'll go to the Trustee. So, we did and wouldn't you know it, they sent it to the wrong stinkin' address. But wait! Now that we aren't filing until Tuesday, I can now cash the check that was finally forwarded to my house and get current on Carmax by tomorrow. So, in a sense I would be current on my loan with them.

So, my question is does anyone know of the likely hood (or has heard of) Carmax repossessing when current on a car loan, but when filing Chapter 7? We intend to keep the car and continue to pay on it (despite not signing a reaffirmation agreement -- our lawyer doesn't do them and I understand why).

[DebtEnder]

Your attorney wants to do a 13 to save a car that is 1 month behind? I had a car, well have a car, that was financed via Carmax finance. Was current up till I filed then did not pay a penny till after BK 7 was done. Then offered them less then half of what was still owed, which was the true value of the car, and they took it. They made NO effort to get the car during the BK. Admittedly my car was of low value. Higher value and recently financed cars MAY get more heat from them. Even then the Chapter 7 auto stay will hold them off till they get relief of stay, and that will take some time. Plenty of time it sounds like for you to get back to current with them. They CLEARLY rather have cash then a used car.

I don't see a good reason for you to go into a BK 13, pay a few thousand more in FEES just to cover a 1 month arrears on an auto loan. The 1k you lost whit the bank levy is still less then what you will pay extra in a ch13.

[wikkibird]

See, I had the same thought... I mean, now it looks like I have until Tuesday to ultimately decide, but yea... the car is actually worth more per KBB value (I think) than what I ow. I have $4,450.39 left on the loan and my payment is $422.89/month (so, right now its like 10 months, but if I catch up on my payment, it'll be like 8.5 months).

[chicagoannie]

Whoa - I am no expert and others will chime in...but I believe in a Ch 7 in most (all?) cases you can keep your car as long as you make the payments. Most people on this forum will advise not to even reaffirm the loan, just keep paying.

If you pass the means test and qualify for the Chapter 7, I would not do a 13 unless absolutely necessary. Especially over 1 car payment. How confident are you with your current attorney?

[wikkibird]

Not a 100% confident, but he was recommended as one of the best in Colorado Springs and honestly, I don't think we have the time for another consultation (and we've already paid quite a bit). At the initial appointment, he did recommend a Chapter 7 (as we pass the means test for the past six month period), but I will have to back up and say that it wasn't him, but one of his paralegals, that recommended a 13 instead. So, I was assuming that a paralegal would be speaking on his behalf, but perhaps I've made an error in that assumption. So, I did send my questions today to a different paralegal in his office and she wanted to speak to my lawyer directly and see what he recommended. The more and more I think about it, I think I do want to do a 7 and just tell the Trustee we are fine with paying back the money taken from our account if he sees it as a preferential payment. I just want to get this done and over with and the sooner, the better!

And, Chicagoannie your picture is soooo cute!!