Pleasant surprise? (Direct pay car loan)

[Becca1000rr]

Hey everyone!
I was an avid lurker of this forum prior to and in the early stages of my CH13.
We are 3 yrs and 2 months in! Whew!

anyways! Long story…. Long lol, my prior vehicle was repoed due to being 1 month late (consistently but always paying the late fee.. just couldn’t get caught up and of course I couldn’t skip a payment because I had prior late payments 🙄)
since the payment was ridiculous, I told the lender to keep it, and in turn I was being sued for a remaining $16k 2 months later , which lead us to jump on filing.
I obviously needed a vehicle so my attorney told us to go buy one prior to filing. Which I did, at an insane interest rate basically doubling my finance amount. This was a 72 month loan. Which I’ve made 40 months of payments on. Due to how new the loan was, it couldn’t be crammed down into the BK and was listed as a direct pay.
today I received a check from my loan company… unsure of what it was I called them. They proceed to tell me the loan is paid off and that was a refund for over payment. Umm, excuse me?
thinking this was a very expense error on their part, and the bankruptcy division being close an hour earlier, she couldn’t really give me any details, so I was left with a very curious mind.
so I started some PI work lol. I logged into NDC, and looked into my direct pay claim to them. The “scheduled amount” is only $16k and change, which divided by my monthly payments, equals out to pretty much the 40 months I’ve paid. I also went even further and looked at our dmv site to where you can request a title copy, and the title type no longer says electronic lien, it says PAPER!

so now to my actual question..
I didn’t think the whole “creditors can only claim what it’s worth not what you owe” only worked on the crammed down vehicles (my husband truck is in our plan)
Did I literally just pay off my vehicle in half the time?! Which sounds extremely exciting, but the Debbie Downer in me is now wondering if the trustee is going to want that extra money added to my plan now.

[justbroke]

Welcome to BKForum.

In Florida, some Chapter 13 Trustees will pay all of the secured debt first (well cars and things that are to be paid during the life of the Chapter 13 -- so usually not homes). My vehicle was paid off after 18 months because ALL the DMI and the regular payment for the car were lumped together and the Trustee was making $1,000+ payments to the car each month. It was so shocking, that when I had another issue and told the Trustee (themself) that the car was paid off, they were shocked because most Chapter 13 cases don't have enough DMI to payoff all the secured debt "very" early in a 60 month plan. It was a win for me because at that point I was getting a divorce (the other issue) and had to pay alimony.

After the car was paid off, the Trustee then did the same with the priority debt, where they only started paying the IRS after the car was paid off. (Check NDC and look at how much was sent to the lender each month. For me, the Trustee was paying more than 4X the normal payment.)

It's just how the prioritization works. And, if your lender chose to cramdown the amount on their own and file a claim with a lower value... that's on them.

As for your PAPER lien status, that's not a good thing. In Florida we like to keep electronic titles because it's easier to deal with them. You will need to look to your mail for the title which the lender should send to you. They should also include a couple of pieces of paper indicating that you paid off the lien. With that, you can march into the DHSMV or Tax Collector's office and get it put back to electronic AND have the lien removed (your title will be clean at that point).

Congratulations on your early payoff of the car. Just keep it insured because you don't want to lose that asset (since you no longer owe any money on it)!

[Becca1000rr]

thanks! However, my car wasn’t included in our payments to the trustee, I was still paying the lender since the loan was only a couple months old when we filed.
I was under the impression that I would be paying that in full, according to the terms of the loan. Which would still leave me with 3 more years of payments. I’m so confused! 😂

Welcome to BKForum.

In Florida, some Chapter 13 Trustees will pay all of the secured debt first (well cars and things that are to be paid during the life of the Chapter 13 -- so usually not homes). My vehicle was paid off after 18 months because ALL the DMI and the regular payment for the car were lumped together and the Trustee was making $1,000+ payments to the car each month. It was so shocking, that when I had another issue and told the Trustee (themself) that the car was paid off, they were shocked because most Chapter 13 cases don't have enough DMI to payoff all the secured debt "very" early in a 60 month plan. It was a win for me because at that point I was getting a divorce (the other issue) and had to pay alimony.

After the car was paid off, the Trustee then did the same with the priority debt, where they only started paying the IRS after the car was paid off. (Check NDC and look at how much was sent to the lender each month. For me, the Trustee was paying more than 4X the normal payment.)

It's just how the prioritization works. And, if your lender chose to cramdown the amount on their own and file a claim with a lower value... that's on them.

As for your PAPER lien status, that's not a good thing. In Florida we like to keep electronic titles because it's easier to deal with them. You will need to look to your mail for the title which the lender should send to you. They should also include a couple of pieces of paper indicating that you paid off the lien. With that, you can march into the DHSMV or Tax Collector's office and get it put back to electronic AND have the lien removed (your title will be clean at that point).

Congratulations on your early payoff of the car. Just keep it insured because you don't want to lose that asset (since you no longer owe any money on it)!

[justbroke]

thanks! However, my car wasn’t included in our payments to the trustee, I was still paying the lender since the loan was only a couple months old when we filed.
I was under the impression that I would be paying that in full, according to the terms of the loan. Which would still leave me with 3 more years of payments. I’m so confused! 😂

So that is confusing. I would double check the claim that they filed and see what they put on the claim. If you paid that amount, then you're done, especially if they did a release of lien and send you the original contract (stamped satisfied or similar), and released the lien on the vehicle.