Reedeming a car with equity

[ThreadsSnapping]

We have 2 cars financed with a credit union and they both have equity in them. The equity amounts to about $4-$6K for the both of them. The car will be paid off in March 2009 and the truck in Jan 2010. We want to keep them and not have to start over with new car loans when they are close to being paid off. Now my question is, if the credit union gives us any issues about reaffirming them is reedeming them an option? Would we just pay what we owe? How would we go about doing the redemption?

TS

[BK2008]

I can't see why the CU would refuse to let you reaffirm your cars. It's beneficial to both you and them. They're not losing anything.

If you were to redeem them, they will let you know where to bring the cars (usually to your dealer).

But I really don't see that happening.

[ThreadsSnapping]

I'm not really expecting any problems but just want to have a Plan B if needed. There have been a few posts on 722 redemptions lately and that got me thinking. But all the other posts seem to be upside down and I am not. I guess I am just freaking out as the 341 gets closer.

TS

[BKParalegal]

If you are talking about signing a reaffirmation agreement, then the bank has almost nothing to do with it. It is the decision of the judge to allow the reaffirmation agreement or not. In my districts that I work, I have only seen Chrysler pop a car for lack of a reaffirmation agreement, and occassionally Ford. Most banks are not in the business of wanting stuff back, just the cash. If you are current on your payments, then they typically don't care if you do a reaff or not. In reality no reaffirmation should ever be approved. THink about it, in a chapter 7, you have to show that your expenses exceed your income to qualify. So how is reaffirming a debt post filing anything but a financial hardship. It is just one more way the lenders have controlled the government to do what they want them to.

[BK2008]

My lender required reaffirmation, otherwise they would repo the car, regardless that I almost a month ahead on my payments.

I reaffirmed my car because it has equity, it's a nice enough car,( it's a 2003 Saturn, runs great, has all the bells & whisltles, leather interior...good enuff for us) and my payment is really low. I am hard-pressed to see what I would replace it with for the same amount of $$$. And the lender is more than happy to reaffirm me.

[momof5]

Sounds like with so much equity keeping the cars is your best bet. I think the only trouble that may arise from reaffirmation is if your negative on your monthly schedule. This is something I was fairly unaware of pre 341. I also did not know that if you are negative then you will have to go to a hearing in front of the BK judge for him to determine if you can reaffirm or not. We have decided to just skip all this hassle and let the car go. We show -900 though but have never been late on a payment.

I really like what BKparalegal said... in order to file chapter 7 your expenses have to be more than your income yet in order to prove that reaffirming your vehicle is not a harship you basically have to prove just the opposite!

We are also with a Credit Union who demands a reaffirmation. They also tacked on $600!!! so they can have this car back that we still owe $8800 + now their additional ridiculious $600 fee. They may get lucky and get $2000 for it. Their loss.