Question about lowering vehicle payment

[Bluboris]

My wife and I just had our 341 hearing and the only issue to come out of it was that we have a payment of 628 on my wife's car.

I gave up my truck which had a payment of $680 and bought a clunker.

We'd like to keep my wife's car as it is big enough to carry the family around and our large dog.

Our lawyer suggested walking away from it and buying something else with a lower payment. Doing this would allow us to pay more into the plan.

Using a 5 year term and an interest rate of 19.9% we could only buy a $17,000 vehicle to get a payment of $450 per month. Giving us $230 more to pay into the plan each month.

But wouldn't doing this cause the lender for the car we turn in to be in line asking for more money from my case, lowering how much each lender gets? It seems to me the creditors will get more of my money if I keep the high vehicle payment than they would if I turn it in and buy again.

I am also going to explain to my credit union that I am being instructed to lower my payment by the court to see if they will lower or waive the interest on the loan.

Linc

[optimistic1]

Well obviously you must not be able to cram down the existing loan, and your current payment exceeds what is acceptable or normal for your trustee.

Is it the trustee that has the issue about your car, or the court/judge?

If it is, remember that the trustee is not the judge, and it is up to him/her to decide whether or not you can keep it. If you already gave up one car, then getting rid of the second one seems a bit excessive to me. Your attorney is supposed to fight for you, not just give in because the trustee cries foul.

And you are right, why should you go through all the trouble of getting rid of it, just to have the creditor turn around and get in line with the rest of your creditors to get a piece of the pie.

You should see if the credit union can extend the terms/months on your existing loan, or they can not cooperate and then hand them the keys, that will probably change their mind very quickly.

[Bluboris]

Doing the math I can see that if the CU will lower the interest rate to 1% for 36 months, I will be within the court guidelines for a payment.

I don't think they will but it doesn't hurt to ask.

Linc

[BigJohn]

My wife and I just had our 341 hearing and the only issue to come out of it was that we have a payment of 628 on my wife's car.

I gave up my truck which had a payment of $680 and bought a clunker.

We'd like to keep my wife's car as it is big enough to carry the family around and our large dog.

Our lawyer suggested walking away from it and buying something else with a lower payment. Doing this would allow us to pay more into the plan.

Using a 5 year term and an interest rate of 19.9% we could only buy a $17,000 vehicle to get a payment of $450 per month. Giving us $230 more to pay into the plan each month.

But wouldn't doing this cause the lender for the car we turn in to be in line asking for more money from my case, lowering how much each lender gets? It seems to me the creditors will get more of my money if I keep the high vehicle payment than they would if I turn it in and buy again.

I am also going to explain to my credit union that I am being instructed to lower my payment by the court to see if they will lower or waive the interest on the loan.

Linc

My wife and I both have new (2008) cars. we pay into the plan the full amount of the vehicles at 0% interest. Our plan originally had us paying nothing to unsecured creditors and nothing to one secured creditor that got listed as unsecured (furniture). But now, the plan pays a small percentage to the unsecured debts and a lesser amount (within the plan) on both vehicle loans. I hope that makes sense.

[optimistic1]

BigJohn, how did you obtain a 0% interest rate?

[BigJohn]

BigJohn, how did you obtain a 0% interest rate?

Our lawyer put it in the plan as 0% interest. Neither bank complained. But then, we are making the vehicle payments inside the plan.

[Bluboris]

We're only 9 months into a 84 month loan for the vehicle we want to keep and we are starting a 36 month plan. I am going to ask the Credit Union today if they will agree to 36 payments at 0% in order to avoid repossessing the vehicle and losing money.

At 0% the payment would be $488 per month.

Linc

[BigJohn]

We're only 9 months into a 84 month loan for the vehicle we want to keep and we are starting a 36 month plan. I am going to ask the Credit Union today if they will agree to 36 payments at 0% in order to avoid repossessing the vehicle and losing money.

At 0% the payment would be $488 per month.

Linc

If I were you, I would talk it over with your lawyer and see about paying it within the plan. Lawyers can do a lot of magic, that is what we pay them for.