Chapter 13 after 7... secured auto loan questions.

[Mellaya]

Hello from South Carolina,

I filed chapter 7 pro se last April and received my discharge. I have a 2010 vehicle which was discharged in the 7, but I still have possession of the vehicle. The lender also received relief from the automatic stay during the chapter 7, but just never collected the car yet. I am wondering about the following questions...

1. If I file 13 to keep the car, will a new automatic stay be applied? Or will the relief granted to the lender from the previous 7 transfer over and leave me with no protection?

2. My vehicle was financed less than 910 days so cram down does not apply. The plan is to pay the entire loan amount over the 5 year period. When preparing the plan and determining the payment amount, does repayment have to include all of the lender's legal fees, collection fees, repo fees (if they get it before I file), and full interest of 12.99%?

3. Once I file 13, I see I have to make payments until my plan is approved. Do I have to pay the monthly amount in the original contract, or the amount proposed in the 13 plan? And how soon do I have to make that first payment?

Thanks for your help!

[LadyInTheRed]

Welcome to BKforum, Mellaya!

I don't know the answers to your questions. But, I have a couple of observations.

Why file a Chap 13 only to keep a vehicle? They don't seem too anxious to take the car. The fact the debt was discharged gives you some leverage with the lender. Try to negotiate a new payment plan. If that doesn't work, let them take the car. Then go buy another car that you can afford.

Keep in mind that a Chap 13 is much more complex than a Chap 7. Be very wary of filing Chap 13 pro se. At least go consult with a couple of attorneys before you file.

[Mellaya]

Thanks for the info. It is not that the bank isn't trying to get the car, it is that they have not had the opportunity. I have been very careful because my financial situation is such that I can afford a chapter 13 repayment plan and am trying to avoid the complications of having it repossessed before I file. 13 would reduce my regular car payment. I have a special attachment to the car and with my other debts discharged, keeping it makes sense.

I searched for this particular car for over a year and drove out of state to get it. It is a Premium edition and a color that is hard to come by. It is my dream car that I worked very hard to get. Unfortunately, divorce and moving out of state greatly effected my income. It has since improved after filing 7. Keeping the car makes more sense for me, than spending money to buy a different car. I live alone so I must have transportation.

I also want to add that I did try to work out an alternative with the bank in chapter 7. I attempted to reaffirm the debt with a $3,000 payment to clear up delinquency. They initially refused to give me the reaff and refused to take my money until I started writing letters to higher ups in the bank. Finally, at the last minute, they agreed to the reaff. However, twice they sent me reaff documents with modified higher interest rates without discussing it with me. They did this just before we ran out of time to file. They tried to back me into a corner to agree to the higher interest rate. They were playing very dirty and rude throughout the whole process and speaking to me as if I were some low life scum. They have made it clear they do not want to work with me so here I am planning 13.

[despritfreya]

You REALLY need to talk to an attny.

1. Filing a 13 will impose a new automatic stay. The Order lifting the stay in the 7 does not apply. However. . .

2. Why would anyone want to put themselves through a 2nd bk (will be on your CR) with Big Brother watching for 3 to 5 years just because they have a “special attachment” to some inanimate object? Just does not sound smart at all.

3. The filing of the 13 will most likely result in a Motion to Dismiss for Bad Faith by the lender. Why. . . because you most likely have no other debt and have been hiding property that belongs to the lender. You are in a 2 party dispute. Filing a bk to deal with a 2 party dispute, while not the only factor, is indicative of “bad faith”. You may defeat the Motion. If you file pro se, you will not run up legal fees but, if you hire an attny you can bet he/she will charge to defend you in the Motion.

Sorry, but my recommendation is to give up the vehicle and move on with your life. Some day you may find another one where you will have a “special attachment” and have the ability to pay cash for it.

Des.

[Pandora]

agree with the others - waste of money to file Ch. 13 - you also need to factor in trustee & lawyer fees to that payment.

[TheBajan]

As much as I see you don't want to hear it... you are making a bad emotional decision. You're an intelligent person and have obviously given this a lot of thought but you are not thinking objectively. You've come here for advice on the nuts and bolts of what to do and I'm sure you weren't looking for or expecting these answers. However, beiing emotionally removed from the situation, we are able to see it in a different light. I agree with the others that you should let it go and move on. Take your fresh start, keep the memories and make new ones sometime in the future. I don't say this without compassion but... it's just a car.

Best wishes and welcome,
The Bajan