Forced to Surrender Vehichle

[Ineedhelp2]

I have a title loan on a vehichle through a local finance company (at an outrageous interest rate).

I got way behind in payments, and they were going to get a judgement, but they agreed not to proceed if I paid $500 towards what I owed.

Months passed and I have not made payments and then I filed Chapter 13.

I called the finance company and the balance due is $1,300.

I blew a head gasket, and the vechichle needs an engine replacement which would cost $4,000. It is a 1998 van and the body is in good shape, but I don't know if it is worth anything and don't know how to determine a value of a vehchile's body.

I would like to keep it and put a new enging in when I can afford it.

But the letter from the Bankruptcy Court says that I am to surrender it. (Which my attorney never warned me about).

Is there a possibility I could keep it and make a deal with the finance company? If they take it back, they have to pay to have it towed and then go to the trouble to sell it, and maybe they won't get very much.

But the paralegal at the law firm says I have to surrender it. She was in a hurry, though, and I thought maybe there was a way around that.

[SinkingFast]

I can't help with the Ch 13 issues, but I do have a comment about the van.

That price to replace the head gasket is ridiculous!! You can buy a good rebuilt engine and have it installed for about $2K. So why would 1 part be $4K??

I know they have to basically tear down the top half of the engine to get to the head gasket, but still, that job shouldn't cost 2x the price of a rebuilt engine.

[Ineedhelp2]

The best local quote I could get for installing a rebuilt engine is $4k.

[Ineedhelp2]

Does anyone know how I could come up with a value for a vehichle with no engine?

[lrprn]

But the paralegal at the law firm says I have to surrender it. She was in a hurry, though, and I thought maybe there was a way around that.

To comply with the letter of the revised bk law, as of Oct 2005 all assets such as cars included in Ch 13 must be reaffirmed, redeemed, or surrendered.

However, in most bankruptcy districts nationwide, bk lawyers are finding that unless there is a large amount of equity in the vehicle that makes repossession worthwhile for the lender, as long as you make the monthly payments on the vehicle on time, the lenders leave well enough alone and doesn't repossess the vehicle. **BUT** your bk district may be one of those who has decided to not honor this approach. Be sure to check with your lawyer (not just the paralegal) to see if this is the case for you.

One of the advantages of ch 13 is that it will allow you to make up the missed payments over the life of your plan (although I'm trying to understand why you would even want to keep a very old car like this that will be a money pit and isn't even running??)

[Ineedhelp2]

I definately do not want to pay the $1,000+ balance on it in payments or in a lump sum.

If they want it, they can have it, but after talking with a local dealer today, it would only be worth $2,000 IF it were running. It needs either a new head gasket which would cost over $2,000 or a new engine (which is recommended) that would cost $4,000 (rebuilt and installed).

My attorney says I can cut a deal with them. I think I'm going to ask if they'll let me keep it and discharge the rest. They got a substantial part of their principal back, and it will probably be more trouble than it's worth to take it back.

Considering that if I did pay it off and pay them over $1,000 and then put $4,000 into repairs, I suppose it would be a lot smarter to see what kind of other vehichle I could come up with for $5,000.

[SinkingFast]

Now you're thinkin'!! Take your $5K and shop elsewhere!!

Let it go and don't worry about how the Bank is gonna get it or what they'll do with it. The Bank certainly doesn't worry about you sitting there with a van that does not run.

You gotta do what's in your best interests.

Continue to sink bucks into a money pit or move on to greener pastures.

[arkienurse]

We signed a surrender on hubby's 4 wheeler, but they have never come to get it. Course I would have problems with that since we are paying that debt anyway, although under unsecured debts.