How to redeem a car with 722 redemption option?

[PoorGrammyinBK7]

Has anyone here actually done this?

Attorney said he did not know anyone who had done it - so I am asking you guys if you've had any experience with it?

Someone has offered to give us part of the money to "redeem" one of our cars - maybe we can make up the rest if a "cram-down" is possible.

We owe $4300 approximately. We had it for 915 days before we filed last week. The edmunds.com private party value is around $3500 I think - not sure. I heard they use this, but again - not sure!

Is it a negotiated amount (if so, who negotiates?) or is it set by the trustee? Would sales tax be owed, since we already paid it once?

When is the deadline for doing it?

We may reaffirm the other one (or not - still haven't decided - we owe about the same as its worth at 6.5% interest with 3.5 years to go, so may be better to reaffirm). They are both with a credit union, as is our 1st mtg.

Any advice on this?? Thanks guys!!!!! PG

[Priceless ProSe]

Your attorney is whack! Just joking, kinda. You negotiate any kind of redemption or reaffirmation with the finance company for the car. They have the final say as to whether or not they will sell you the car for less than you owe, if they think you are going to surrender it they might lower the price as they could probably only get 2-3 grand (or less) wholesale. If they allow you to surrender the car that is what they would do (wholesale it), so it is in thier best interest to work out something with you. Give them a call and tell them your intentions, say you only have 3k or so and you want to work something out. MAKE SURE you exempt the car when you file if youre not going to surrender.

Try finding the retail value using NADA.com (can i post outside links here?, if not please erease the .com and put "website")

Oh and when you say, "some one offered" I hope you mean a friend and not a hustler right? Watch out for strangers offering help when your about to lose something.

[csrhjr31]

My husband actually just purchased a car through 722 redemption. He was horribly upside down on his last car, so he surrendered it.

The "bad" thing about 722 redemption was the interest rate 23%. A lot of car dealers that he spoke with said that they couldn't work with him until after discharge. Unfortunately we are a month away from discharge and my husband needs a car for work. The bank that owned his previous car had lifted the stay so he needed a car ASAP.

We live in Illinois and the closest 722 Redemption was in Ohio. So he had pics sent to him and then they had a driver bring the car to us.

My husband jokes around that we have hit rock bottom. He had to purchase a car in the parking lot of a train station. That is where he met the driver.

If he has no late payments in a year, he can refinance his car.

[PoorGrammyinBK7]

It does not make sense:

Is it true that the law allows "722 Redemption" companies to loan money to redeem cars at astronomical interest rates - but no one else can loan money to you for this?

Can someone "give" you money to redeem your car at the fair market value?

And who determines that?

The trustee?

[sunshine mary]

Yes you can do a redemption...I tried. In my case it was filed with the courts my attorney handled everything and in the end Chrysler wanted too much money so I surrendered the vehicle. I did purchase one though the US Bank 722 dealer and although my interest rate is sky high, I love the vehicle and I got a great price !! So I am going to either refinance it or trade it in for a cheaper rate next year if I can't refi sooner. Good luck to you !!

[PoorGrammyinBK7]

Yes you can do a redemption...I tried. In my case it was filed with the courts my attorney handled everything and in the end Chrysler wanted too much money so I surrendered the vehicle. I did purchase one though the US Bank 722 dealer and although my interest rate is sky high, I love the vehicle and I got a great price !! So I am going to either refinance it or trade it in for a cheaper rate next year if I can't refi sooner. Good luck to you !!

Thanks for answering, sunshinemary, are you saying that the lender has the final say? I heard it was the court or trustee. Was your car over 910 days old?

[sunshine mary]

Thanks for answering, sunshinemary, are you saying that the lender has the final say? I heard it was the court or trustee. Was your car over 910 days old?

Well I'm not sure because we did have a court date but after my attorney tried to negotiate with Chrysler we just decided to surrender it so we didn't have to go to court so maybe it would have been up to the judge?? I don't believe the trustee was involved with this at all. I had the vehicle 4 1/2 years. I bought it new.

Honestly I didn't really want the vehicle anymore but I wanted to do the right thing, if that makes sense. Now I'm glad I didn't pursue it. I really can't believe Chrysler would not negotiate and now their stuck with another used car in this awful economy.

[b_girl]

Goodness! Sounds like they make redeeming a vehicle almost impossible to accomplish. We've decided to just go ahead and give up both of ours since we were been approved through USBank for the 722 loan...we'll actually be lowering our monthly payment, even with the extremely high entry interest rate. I just wish they had more vehicles to choose from.

[liz417]

...since we were been approved through USBank for the 722 loan...we'll actually be lowering our monthly payment, even with the extremely high entry interest rate. I just wish they had more vehicles to choose from.

Sorry, what is a 722 loan? Thanks!

[b_girl]

It's a replacement loan, granted under a provision (722) of the new BK law. There are lots of places which do replacement loans, but most are not licensed to do business in our state, so US Bank appears to be our only option. If you've already filed, you should be getting a 722 letter soon. We got 2. ;)

[sunshine mary]

Bgirl, my payment is lower too It took me 3 weeks to pick one out as I wanted a foreign car and guess what, they finally got one in..So if you tell them exactly what you want and wait you might just get it.

Liz a 722 loan is one you apply for while your in BK (we used 722redemption US Bank) and if your approved you can either refinance your current loan at 115% of the NADA trade in value not the amount you owe or get a new car or truck through their car lot.

[b_girl]

Wow! That's good to know, sunshine. It's been a week since we were approved and we're going to call again tomorrow to see if they have anything new for us to consider.

What kind of interest rate did they tell you that you might get once the year is up? We were told 14% the first time, then the 2nd person wouldn't give us an idea, so it made me worried. I can handle the 24% if I think it will go down 10% after that, with the idea that we will refinance it after 2 years. I hate to pay such high rates but it will be totally worth it just to have our vehicle problem solved.

[sunshine mary]

[/quote]What kind of interest rate did they tell you that you might get once the year is up? We were told 14% the first time, then the 2nd person wouldn't give us an idea, so it made me worried. I can handle the 24% if I think it will go down 10% after that, with the idea that we will refinance it after 2 years. I hate to pay such high rates but it will be totally worth it just to have our vehicle problem solved.[/QUOTE]

You know I don't know the one year refinance rate either. With the car I got it was a really good price and I figure I could always trade it in in 12 months with possibly a lower rate. My plan is to try with my CU in 6 months after discharge since I've successfully had 3 car loans over the last 15 years that I've pain in full and they weren't involved in my BK at all. I don't have a clue if I could get it or not but I am going to try. If that doesn't work I might take a loan against my 401K at that time.

[csrhjr31]

My hubby was told that after a year/refi he could adjust it to at least 18%-- they said that would be the highest, he couldn't tell us what the lowest would be.

[b_girl]

I just found out from my husband that the loan officer at 722Redemption told us 12-14% after a year...the guy at the auto place was the one he asked who couldnt' say. What a relief! I'm feeling better about it except we still can't find a vehicle.