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    #16
    Here are the reasons for a Section 722 Redemption, 2006 Pontiac GTO. Deciding factor is what $$$ for settlement or redemption:

    1. Over the years, paid over $25,000 to Wells Fargo Bank through my monthly payments. This does not even take into account whatever
    the settlement amount, or at this juncture what the judge would decide the FMV to be, based on the AS IS condition.

    2. Over the prior 1 year, General Motors warranty work performed just prior to expiration of vehicle warranty:
    Brand new transmission, differential, clutch which is over $10,000 in warranty repairs. Each of these repairs on the car include a new 3 year/36,000 mile
    warranty backed by General Motors. I have the vehicle warranty report directly from the dealership, which is through General Motors, shows the new warranty expiration date and mileage for each part replaced.

    3. Over the last 6-8 months, I've paid for new tires, brakes, struts and shocks. This is another $2,000 spent on the car, personally by me. Reason being, intention was to "keep" the car. Body, paint, interior and suspension to car are in excellent condition. Both my wife and I had planned to keep the car, retain the car.

    4. Never missed a single monthly payment on the car, in fact even into the bankruptcy 100% current on payments. Further, our initial bankruptcy filing was checked off that the intention was to "re-affirm" and keep the car. However, after the 341 hearing the engine ceased. This all transpired over the last 30 days or so, since that timeframe been trying to figure this all out.

    I do agree with you about the emotional aspect, simply let the car go. However, based on the 4 factors above it makes more sense to get a "settlement agreement" worked out. Was hopeful bank would settle for about $4,000, which they'd not do. As for the actual repairs, I have a family member whom is a certified auto mechanic. He'd pull the motor, open up the engine block and replace whatever is broken. Vast majority of labor fees would be waived, since family would get my total out of pocket cost factor less then $4,000. Yet, once again it all depends on what the FMV is for the car.

    Based on the info. provided thus far, what is your opinion on how the BK judge would rule, FMV? I do have the 2 page dealership line by line work order, from our local GMC/Pontiac service department manager. Also, included all the contact information to the service manager. Even 1 month later, Wells Fargo never even picked up the phone to call the service manager. I've stopped by the dealership to ask the service manager, inquire about it. So, with everything invested financially over the last few years prefer to get a very reasonable settlement, or redemption price for the car. I have discussed all this with my attorney, over the last month and correct he more or less punted the ball. Bottom line, what would the judge rule as the FMV considering the AS IS condition of the car, engine repair bill is the deciding factor. I don't know, hopeful you'd have some input, of course opinion only.

    My BK attorney advised he'd call Wells Fargo BK dept. today. Said that it may be too late to file a Section 722 Motion to Redeem. It has been 37 days since our 341 Hearing, confirmed with our BK attorney. I do appreciate the input, advice and do realize it's based on opinion too.
    Last edited by 1richard1; 06-14-2011, 10:20 AM.

    Comment


      #17
      You have to suspend all logic and emotion from this. The bank wants to minimize their loss and you want to maximize your gain (what you put into the vehicle). First, the Court does not care how much you put into the car. If you had/have a warranty issue or a manufacturing defect, you'd settle that under your State's lemon laws or sue them in non-bankruptcy court. Second, I think you still have emotion in this. I believe that you are trying to ratify why the FMV should be $4K, where the lender will certainly fight and say it's closer to -- or as close to -- $14K as possible.

      This is why you just go to the Court to do this. The 11 USC 722 Motion to Redeem is not too late if you get it all done TODAY, served overnight on the creditor, and filed with the bankruptcy court tomorrow. This would "stay" the sale. Then you just see what the Judge wants to do with valuation. I don't know of any Judge that would agree that a $14K car is only worth $4K because of $10,000 in necessary repairs. In the insurance industry, that's known as a "totaled" vehicle.

      Again, if you want to dabble, you need to get this before the Judge. I can't speculate on how your Judge thinks or would view this information. What I do know is that the numbers are shocking and if the creditor comes in and says that they can sell it at auction for way more than you're asking (closer to $10K), then you will probably be out of luck. Time is of the essence. You need to decide what to do today (next few hours), and get the Motion and attachments all done today.

      Personally, I would not pursue this; not because time has passed, but because it just doesn't make any financial sense. You are talking about a car that you yourself have put in over $25K of payments and over $10K in warranty repairs. You have then, in the last year, spent over $2K on out-of-pocket "maintenance" on the vehicle. Additionally, you are talking about at least another $7K-$10K of repairs. This exactly describes the type of asset that you want to dump. The only reason that you would want to keep this car, is emotional attachment.
      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog

      Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

      Comment


        #18
        Wells Fargo just called, supervisor from their BK dept. Said they received the documents faxed yesterday and here's what they advised:

        1. Their best offer is $7,500
        2. That auction scheduled for this Friday will be postponed
        3. To have my attorney contact them, and to file the Section 722 Motion to Redeem
        4. That at a $7,500 amount bank will not show up at the hearing, nor challenge this amount
        5. All notes documented by her in their computer, said if I call back or my attorney whomever answers the phone within their BK dept. will have the notes

        Awaiting to hear back from my BK attorney, he's going to talk with the bank and get back with me. He mentioned earlier today about it possibly being too late to file a 722 Redemption, reason being is the BK discharge is in approx. 29 days. As for all the $$$ spent on the car, each recently replaced drivetrain component came with a new 3 year/36,000 warranty. However, I do agree at $7,500 plus likely me shelling out another $4,000-$5,000 to a family member to fix the engine is not financially worthwhile either. Preferred a settlement closer to $4,000 yet unlikely this will happen.

        Comment


          #19
          It's not too late. The discharge can be extended. As a matter of fact, if you get the bank to sign a "Stipulated Order Granting Motion to Redeem"... you can be done. So, it's not "technically" too late.

          I would still not do this deal, but that's me.
          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
          Status: (Auto) Discharged and Closed! 5/10
          Visit My BKForum Blog: justbroke's Blog

          Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

          Comment


            #20
            Does the BK judge first have to sign the "Stipulated order Granting Motion to Redeem?" How does this transpire? Hoping we can obtain this without having to go through the entire 722 Redemption process, $995 fee as well. My assumption, likely need my BK attorney to draft this legal document so it's all handled properly.

            Sounds like an option, will ask my BK attorney about this today.

            Comment


              #21
              I did read up online about a "Stipulated Order Granting Motion to Redeem." If my attorney prepares this document, faxes it to Wells Fargo Dealer Services and then electronically files this document with the BK court, added to my BK case file, judge approve it are we done?

              Or, do we still need to file a Section 722 Redemption as well?

              Sounds like much more efficient, quicker to do what you said, bank signs it, then attorney files it with the court to review and approve.

              Comment


                #22
                What about this idea: Wells Fargo Bank prepares a re-affirmation agreement, in the agreement revised payoff is $7,500. In addition they can even add on the initial tow fee and the daily salvage fees. I'd prefer a re-affirmation agreement with the reduced payoff. Other alternative is the Stipulated Order Granting Motion to Redeem yet I don't know how this all transpires. Further, the $7,500 would come from a redemption settlement company and likely interest rate would be sky high. Meaning the interest to be paid would be very substantial, compared to my current interest rate with Wells Fargo at 7%.

                Comment


                  #23
                  Update:

                  1. Wells Fargo will only accept a re-affirmation agreement at the entire balance, plus all other fees since time of repo. Makes no sense, then talking about $14,000.
                  2. My BK attorney called, said he can indeed file a Section 722, Motion. Instead, for approx. $500 said he'd file the "Stipulated Order Granting Motion to Redeem." My attorney said much less involved with this, so thank you for the idea. Attorney was on board with this idea. Wells Fargo BK manager advised anything below $7,500 and they'd challenge the FMV with the judge.

                  Important, my attorney said to call a few redemption loan companies. Make certain they'll fund the $7,500 based on a stipulated order, not require a full Section 722 Motion to Redeem. Any input on this? Will make some phone calls tomorrow, Wed. I do appreciate the input, has helped in communicating both with my attorney and Wells Fargo BK dept.

                  Comment


                    #24
                    Originally posted by 1richard1 View Post
                    Important, my attorney said to call a few redemption loan companies. Make certain they'll fund the $7,500 based on a stipulated order, not require a full Section 722 Motion to Redeem. Any input on this? Will make some phone calls tomorrow, Wed. I do appreciate the input, has helped in communicating both with my attorney and Wells Fargo BK dept.
                    It's still a 722 Redemption! You would file the Motion to Redeem and immediately file a proposed Stipulated Order Granting Debtor's Motion to Redeem. Then you're really done. You do need to get funding though.
                    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                    Status: (Auto) Discharged and Closed! 5/10
                    Visit My BKForum Blog: justbroke's Blog

                    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

                    Comment


                      #25
                      Is the Motion to Redeem and immediately file a proposed Stipulated Order Granting Debtor's Motion to Redeem any different then a Section 722 Redemption? Hoping your idea is less time intensive, cost less $ to my attorney and I don't have to make a court appearance to the judge. Instead, that my attorney will electronically file the documents. My attorney mentioned today $500 for the Stipulated Order, yet $995 for a full Section 722 Redemption.

                      As you can tell, I just don't know the difference in time, effort involved by our BK attorney. He is fully open to doing it all and proceeding, Wells Fargo BK manager on board too. Advised by them to have my attorney call them to verify this will all be filed. Also, once done for my attorney or me to fax them a copy too. Wells Fargo said to just have my attorney handle it, and for us to stay in communication with them.

                      As for funding, began making calls to some redemption loan companies. High interest rates, yet would be for short term plus no pre-payment penalty. I pulled up our credit reports and FICO scores. Even with the BK 7 all 3 scores range from 610-640. Outside of all the accounts indicating included in BK7, $0 payment and $0 balance, many, many prior accounts over the years with a perfect pay history. Also, we did a re-affirmation on my wife's car and just waiting for the judge to approve or deny the agreement. Shows on Pacer, signed off by my wife and I along with the bank and my attorney.

                      What's sad, until the Wall Street economic collapse in 2006 our credit scores were all 720-750. Lots of cash reserves, investments, equity in the home and so forth. Since that timeframe, huge pay cuts, job stability, loss of investment funds, 40% decline of home value and on and on. Point being, everyone impacted by de-regulation of the 1980s to present. My advice, everyone should watch the movie, "Inside Job." Unfortunate, even President Obama is having to know suck up to the same fat cat financial services industry that caused the recession, near Great Depression 2. He needs their vast sums of $$$ for re-election. Financial industry and Obama have a love-hate relationship. Bottom line, U.S. has the best system of govt. that money can buy.
                      Last edited by 1richard1; 06-14-2011, 07:31 PM.

                      Comment


                        #26
                        Is the Motion to Redeem and immediately file a proposed Stipulated Order Granting Debtor's Motion to Redeem any different then a Section 722 Redemption? Hoping your idea is less time intensive for the attorney vs. a Section 722 Redemption. Thanks again.

                        Comment


                          #27
                          This IS a 722 Redemption. This is the only way that this works! You must have a Judge's signature either with the judge setting the value, or a stipulated order agreeing to the value. In a stipulated agreement, both attorneys (parties) sign the agreement and then it's filed. It saves tons of time since no hearing is required.
                          Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                          Status: (Auto) Discharged and Closed! 5/10
                          Visit My BKForum Blog: justbroke's Blog

                          Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

                          Comment


                            #28
                            Ok, I understand and makes more sense now.
                            U.S. Bank did "approve" a redemption loan. Also, they've already emailed their documents over to my BK attorney this afternoon too.
                            Also, spoke with Wells Fargo BK dept. today. Re-verified that their settlement offer of $7,500 stands.

                            Comment


                              #29
                              It looks like your ball is now rolling! Best of luck with the outcome. Let me know how it works out with the stipulated order.
                              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
                              Status: (Auto) Discharged and Closed! 5/10
                              Visit My BKForum Blog: justbroke's Blog

                              Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

                              Comment


                                #30
                                I'll post updates as we go, helps out other forum members.

                                It was your knowledge, advice and opinions that have helped in speaking with Wells Fargo BK dept. and with my attorney. As of now, up to my attorney to prepare the docs. that you mentioned. When I spoke with him yesterday he agreed with you, also impressed when I spoke with him.

                                I wanted to say thank you.

                                Comment

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