Credit Union filed objection to our plan (vehicle loans crammed)

[becky20]

So just got in the mail a huge packet that basically states that the credit union is objecting saying that we improperly valued the vehicles.

so what's next.... How is value of vehicle determined???

[13bound]

So just got in the mail a huge packet that basically states that the credit union is objecting saying that we improperly valued the vehicles.

so what's next.... How is value of vehicle determined???

http://www.nada.com/ this is what was used on mine.

[HHM]

Have you had the loans on the vehicle for more than 910 days?

[becky20]

Yep we've had the loan for over 910 days - sounds like the aren't objecting to cramming it, just the value we submitted... I think our atty used KBB.com but there are three choices - retail, trade in, or private party... I think my atty used the middle one, trade - retail is the highest, trade in the lowest and I'm pretty sure she used private party...

[CountryGirl]

In our area the Trustees like to use the "Black Book" value which is basically an "Auction Value" because that is how they will sell the vehicles. Auction value is generally lower than even the trade in value. As with many things in BK, I suppose this would be at the discression of the Trustee. I would bet though that there is a good chance that your values as listed will stand. Certainly, the trustee would not rely on retail values.

Good Luck.

[HHM]

What evidence did they cite in their motion that your value was wrong?

In any event, this is a very simple AP. Take some pics of the car and the odometer, go to a couple different websites and get values. Odds are, this will probably be negotiated before it ever goes before the BK judge (incidentally, it is the Judge that decides this issue, not the trustee).

In a cram down, I believe the rule is you can reduce the value to current "fair market" value; thus, you typically cannot cram down using liquidation value.

[becky20]

They attached copies of our contracts for the loan, and printouts of kelly blue book - suggested retail value in EXCELLENT condition (which it even states on the page less than 5% of all used vehicles fall into the excellent category.

Interestingly, the explanation that also printed on the page for Blue book suggested retail value states "The kelly blue book suggested retail value is representative of dealers' asking prices and is the starting point for negotiation between a consumer and a dealer. The suggested retail value assumes that the vehicle has been fully reconditioned and has a clean title history. The value also takes into account the dealers' profit, cost for advertising, sales commissions and other costs of doing business. The final sale price will likely be less depending on the vehicles actual condition, popularity, type of warranty offered, and local market conditions."

the mileage they are assuming is actually a little higher than our actual mileage, but in no way is my car in excellent condition (it's a 2000!), and my husband's is nice but not excellent I don't think... Neither of our cars get excellent gas mileage (husband's actually SUCKS)

[Flamingo]

We had two vehicles crammed in our Plan. Our attorney, right in front of us, went over the cramming process and utilized the Blue Book value for each vehicle (stated that is what is utilized) and added in a "little interest" to keep them happy. Our vehicles were 3 years old at the time, both 1999's and we filed in 2002. Neither bank complained.

Credit Unions are tough...yours just wants to try to get all it can get.

[becky20]

We had two vehicles crammed in our Plan. Our attorney, right in front of us, went over the cramming process and utilized the Blue Book value for each vehicle (stated that is what is utilized) and added in a "little interest" to keep them happy. Our vehicles were 3 years old at the time, both 1999's and we filed in 2002. Neither bank complained.

Credit Unions are tough...yours just wants to try to get all it can get.

But what blue book value? KBB (Kelly blue book) has three options - retail, private party, or trade-in? My atty used private party and it looks like the credit union used retail (which, based on the description I posted above about what retail includes) seems pretty high. The difference between what CU is saying the value is and what WE are saying is the value is several thousand for each - we stated that my car is worth 5800, they are stating 9400 (which is more than we currently owe - we owe 8000). for our truck, we stated it's worth 13350, they're saying 17,660...

[HHM]

Well, welcome to the world of credit unions and BK. I really never understood why the financially distressed bank with credit unions.

In my opinion, you will probably win this one, but its a hassle.

[Flamingo]

From what was done I am assuming our attorney used what he thought would fly and added in some interest to keep the hounds at bay. He stated they use "Blue Book" value and didn't mention there were three values involved as you state. I am assuming one's attorney would be experienced enough to know what would fly in their specific District. I am assuming you ran into a problem with this because it is through a credit union.

[Mark80]

Reading over this thread I have to ask, what does crammed mean? Is it when the auto loan gets combined into your chapter 13 payment?

[woeisme]

Crammed only applies for car loans that are more than 910 days old, and only if you still owe more than the vehicle is worth after paying 2 1/2 years on it. So if you are into year 3 of payments on a vehicle, owe 10K on it but say it's only worth 8K, then in the BK process you can "cram down" the loan to the 8K the car is actually worth, and the bank (or credit union in this case) has to eat the other 2K and take it as a loss. This credit union is trying to prevent the cramdown, or at least prevent them from cramming the value down as much as the OP's plan petitioned for.