New here with a Redemption question?

[MaggieMay]

Hi everyone! I'm new here, though I have been reading the forums for quite a while.I did a search for USDA and could only find threads about people trying to GET loans from them AFTER bankruptcy. I have a direct loan from USDA/Rural Development and I defaulted on my loan. I was going to just wait it out, save as much money as I could, and wait for them to foreclose. Then I found out they sent me to the Treasurer for offset of my income tax refunds. Because I qualify for EITC, my refund is going to be almost $6,000, which was going to go straight to my savings. (I'm actually very good with my money; I defaulted on my loan because I didn't want to delay the inevitable, as being a homeowner is not financially sustainable for me over the longterm and I don't want to add more debt with repair loans, etc.)

The only debt I have is my mortgage (which I am upside down on by about $30,000) and my car (which I owe about $6,000 on). I also had $350 on my credit card, which I logged onto yesterday to pay and saw a $0 balance and it said my account was closed. (I know I don't have to/shouldn't pay on a dischargeable debt but credit cards are my nemesis - nemeses? - I hate that I used it and I wanted to pay it and see that $0 balance!) I am filing pro se, and I submitted everything about a week ago. So I guess that means I filed correctly? My car loan account page says no payments are scheduled, so I assume my automatic stay has begun.

I wouldn't have declared bankruptcy if it weren't for USDA coming after me. They would take my refunds (Did I mention I have a kid starting college this fall?) and they also almost always come after you to collect the deficiency after the auction is held, from the very little I can find online about it. I need to get out of this house and move on and I need to not worry about when the ax is going to fall. Homeownership has NOT been "The American Dream" for me.

When I filed my intentions, I checked the box to Surrender the house, and checked the box to Redeem my car. That's the only debt I have, now that the credit card account closed. And I do have the cash to pay the fair market value of my car (about $3,000-$4,000) as I have been saving saving saving since I stopped paying my mortgage back in August. This money is exempt as it is comprised of both child support and SSDI, neither of which the trustee is allowed to take. They also can't take my tax refund, as that is all Earned Income Tax Credit, which falls under our "public assistance" exemption.

I have been researching for MONTHS and MONTHS (I've wanted out since my first week here 3.5 years ago, no joke!) and I thought I had everything figured out and I felt pretty good about filing on my own. But the one thing I missed (which I realized by lurking on these forums) is that I need to file a Motion to redeem my car. I am very early on in this process; I haven't even gotten my date for my creditor's meeting or even my case number or my trustee's name or anything. I filed through the mail, if that makes a difference.

I am having a hard time finding specific step by step instructions on how to do this. I can't even find the form online (although I was up until 4:00 am looking and maybe my exhaustion was preventing me from being coherent, so I'll have to look again). So do I just download a form (once I find it), fill it out, attach the valuation (a printout from what I used online to figure out its value) and mail it to the court? Or do I bring it to my creditor's meeting? Do I file it and send one to the lender and wait for them to reject it and if they don't, the court lets me redeem it and there is no hearing? Is there a hearing every time no matter what? What if I can work out a figure on my own with the lender? Do I still have to file the Motion to Redeem, or can I just bring the agreement to the creditor's meeting? I have done a search on this as well on these forums but can't seem to find exactly what I'm looking for.

I have felt very confident up to this point, but would like some help in what I actually have to DO to make this happen. I know what redemption is and how it works, just not the logistics of how to make it happen! Thank you so much to anyone who can help me with this.

[MaggieMay]

I just wanted to add something else. I read this through again and was horrified at something I wrote, but there doesn't seem to be a way to edit? My comment about how I "actually am really good with money" or however I worded it. That was NOT an implication in ANY way that anyone on here ISN'T. I should mention that I'm a bit like Sheldon Cooper sometimes and the things that come out of my mouth (or my fingers) are not filtered for context first. The reason I said that is because for years and years, I was NOT good with my money. Debt up to my eyeballs, credit cards, just complete and total money mismanagement. I dug myself out of that hole and became somewhat of a personal finance nerd. I am SO good with my money now (except for my huge mistake of buying a house!) that it really really sucks for me that I am walking down this bankruptcy road again, when I thought I would never be here.

That's all I meant by that. It was a statement about MYSELF, but it came off quite differently, and for that, I apologize.

[justbroke]

I am having a hard time finding specific step by step instructions on how to do this. I can't even find the form online (although I was up until 4:00 am looking and maybe my exhaustion was preventing me from being coherent, so I'll have to look again). So do I just download a form (once I find it), fill it out, attach the valuation (a printout from what I used online to figure out its value) and mail it to the court? Or do I bring it to my creditor's meeting? Do I file it and send one to the lender and wait for them to reject it and if they don't, the court lets me redeem it and there is no hearing? Is there a hearing every time no matter what? What if I can work out a figure on my own with the lender? Do I still have to file the Motion to Redeem, or can I just bring the agreement to the creditor's meeting? I have done a search on this as well on these forums but can't seem to find exactly what I'm looking for.

Your Motion to Redeem should have been a "first day" motion (or shortly after filing). You will need to look at some cases in your area and find the formality of the motion. (I would go to the courthouse or a law library where you can use PACER for free. Otherwise you could incur a huge PACER bill. My first PACER bill was over $115 if I recall correctly.)

You may also need to learn your local rules regarding "Negative Noticing." If your court supports this, you can file the motion with a legend (correctly created) that indicates that the judge can rule on the motion if the respondent does not respond in the time indicated. This is the finer practice of what we call Motion Practice. You will need to learn how to do that.

The most important things is that you really need to learn how to perform service on a corporation or a fiduciary (bank) when this is a contested matter. I really can't tell you more about how to do that, but you may be able to ask the Judge's law clerk or ask a "procedural" question from the Clerk's office. This procedure is very important because the service can't be done by you personally. The service of this type of motion (contested matter) has the same formality as an Adversary Proceeding / Complaint (AP). I think the service requirements are in FRBP 9014, but you should also check if there are any local rules as well. (I didn't double check if it's FRBP 9014, but you need to check that.)

You also have a bunch of evidence that you'll need to attach as to value and also note where you are going to get the funds. I highly suggest researching cases within your District.

Please search this forum for "redemption" and read some of the stories. This will likely go to a hearing (preliminary and maybe even a final evidentiary hearing) based on the creditor and their appetite for what you are proposing. You will need to "work" with the opposing attorney and you may just need to walk away and make them "eat steel."

As you can read, this is one of the downsides of Pro Se. This is the real stuff. The thing that lawyers get paid $$$ to do. Can someone do this? Absolutely, as I have successfully redeemed a car (and even for far less than the creditor "wanted" to redeem). Is it for everyone? Absolutely not. For what it's worth, I redeemed my car for $11,000 less than the balance on the note.

[MaggieMay]

Thank you for the response, justbroke.

Yes, as soon as I realized that this was a "first day" motion, I wanted to immediately do what I needed to do to get the papers printed out, filled out, sent out, etc. but then Snowmageddon hit the East Coast and I have been housebound for a couple days. We're expecting 8-12 more inches on Wednesday but hopefully tomorrow, I will have a respite and can get that done. In the meantime, I have contacted my car loan lender through email to start a conversation about it, so that I can get a sense of whether this will be contested or not.

We don't have a law library within a few hours of me (I am very rural - my bankruptcy court is 2 hours away) but I actually work at a public library, so maybe that might get me somewhere?

From what I had read on several sources, you just need to attach a printout from a website like Kelley's Blue Book showing the valuation to the Motion, and I do have the cash to redeem it, using funds that are exempt.

Yes, I can see this is a downside for sure. But I am pretty confident that I can do it. I have been on my own for a long long time now and have pretty much had to do everything on my own and if I didn't know how to do it, I had to learn. There might be some bumps, but as long as they aren't bumps that get my case thrown out, I'll be ok. I consider filing successfully the 20+ pages of forms I had to fill out a big win already! And in the grand scheme of things, I consider this a pretty simple case. A house I'm surrendering, a car I want to redeem, no other debt, and not a whole heck of a lot of assets, all of which are exempted.

I just needed to know the steps on how to do the redemption. I did search for redemption, redeeming car, redeeming secured property, etc. both on here and other websites and have found GREAT information, but nothing that breaks it down into: This is what you need to do: 1. 2. 3. This is the form you need, etc. That is how my brain works. But I will figure it out, I guess.

Cross your fingers that the snow will stop for a few hours, so we can get cleaned up and I get to work tomorrow on this! Right now, my car is stuck in a snowbank.

Congratulations on your successful redemption of your car (and for $11,000 less than what you owed!). That is great! I hope for the same success. (Though mine is only a couple thousand less than what I owe)

Thanks again for the reply.

[justbroke]

I know how to do the process, but I can't explain or demonstrate how you should do it. If you can afford it use PACER against your District ot find 2-3 cases that had a redemption. It may be easier if you have the court's hearing docket that is outside PACER. Find some cases that had a redemption (11 USC 722) and then pull just those documents.

The key is the Motion to Redeem. As for evidence, you will need evidence that is admissible in your district. In my district they use clean retail from Black Book. Others will use NADA. Others may accept Edmunds.