My first post - some complicated questions..

[IBroke]

Thank You for your reply!

1. You said "if they are willing to redeem at its current value."
I was under the impression that it was ME to decide if I want to redeem and not the lender? If not, why does the law mention the current market value and not "a price both parties agree on"?

2. If I use KBB, which of the 3 values do I use? Trade-in?

[JRScott]

Hi Folks,

First of all, great to be with you! Seems I found the right place to prepare myself for my CH.7!

Now here's my problem:

7 months ago, my mother and I got a joint car-loan at one of these "buy here, pay for an eternity" dealerships. I decided to file for BK Chapter 7 and redeem the car. The balance of the loan is $7,000 and the value of the 10-year old car is less than $2,000. Here are my questions:

1. CAN I redeem the car at all because the loan is less than 910 days old or does this only apply to Chapter 13 cases?

2. Is retail- or trade-in value used to evalute the required redemption-amount? I was thinking about driving the car to a CarMax and get a trade-in appraisal from them since I read on a different site that KBB- or NADA-sources wouldn't be as current and might reflect a better market than we actually have (and so, higher values).

3. Is it true that my mother, the co-signer, will be off the hook if I redeem the car or will she still be liable for the money the creditor is short?

4. In case there is an expert on credit-reporting on this board, will there be a negative impact from this account after I have redeemed the car? So far, I never mssed a payment and it's a positive tradeline. Does FICO calculate a reedemed included in Bankruptcy different than a paid-off account? Would the remark "IIB" actually cost me some points (maybe through a hidden reporting-code) or is there only a different REMARK on the account?

5. My mother is going to file Chapter 7 as well - just a few months later. Is there anything I have to consider in regard to the auto-loan (Do I have to continue payments to avoid a late-payment on HER report until SHE files or will my filing and redemption take care of her responsibilities as well?)? I assume the car would show up on her report as paid WITHOUT a remark of BK on that account if 3. will be answered with "YES".

WOW, so many questions in my first post..

I would ask my attorney but I don't have one - too expensive for me..

Thank You very much in advance for ANY help!

1. The options in a Chapter 7 are surrender, reaffirm or redeem. So yes if they are willing to redeem it for its current value you might could work that out.

2. In most districts you need a KBB or NADA value, check with your lawyer before getting another estimate as it might not be accepted by local trustees.

3. You need to check with your lawyer but I believe if the car is redeemed she's off the hook.

4. On your credit report it will show as IIB which means included in bankruptcy. Just like all such accounts that are IIB. (Note you have to list all debts public and private legally).

5. Depends on what happens. If you file bankruptcy and do not redeem the car then yes she would be responsible for any payments if she wanted to keep the car. At the time you file the lien will go into her name, she is not protected by your filing so they can call her as cosigner. If she does not make timely payments then yes they will note late on credit reports up until such time as she files and then it will be IIB.

[IBroke]

I don't think it's an issue. Sure, you have the cash - but keep in mind that this cash goes to one of the creditors - every single penny of it. And since everybody needs a car...

Since we are not filing at the same time and due to the fact that it's a joint loan, I can point out that the money for that car comes from my mother. She's using the car for her job and needs it, so why shouldn't she make sure that she can keep the car by paying for it? If I would have to surrender it, she would be required to pay the entire loan WITHOUT having a car. This car is the only ride for the two of us and since I'm currently unemployed, I don't see how it would be responsible to obtain an additional loan for that car - I don't even know how I should qualify in the first place. Everybody needs some kind of transportation and if a 10-year old car with almost 100K miles and a value of $1,500 is too much for 2(!) people, I'd be interested to find out what a judge would think is "appropriate".

[freshstartfl]

722 redemption is where you purchase it for the fair market value, yes. Reaffirm is where you continue with your current loan. Redeeming with cash would be a good option. Those redemption loans come at a steep rate, and I honestly don't think the 722 financing people will deal with an old old car or a high mileage car. I wonder, though, where you could safely keep the cash or exempt the cash until it's time to redeem? I don't think I've read of anyone on here who redeemed with cash, so that's an interesting situation. The fact that you've only had the loan for 7 months, tho, is a concern, because it can't be a newer loan. Hopefully someone who knows the ins and outs of that will respond.

As far as your Mom is concerned, if she's also filing BK, I wouldn't worry about how it'll affect her credit or whether she'd be "on the hook" in the meantime.

[IBroke]

Welcome to the forum! Sounds like you've been doing a lot of homework and preparation for this. I'm not 100% positive on your questions, so I'm not going to answer them based on hunches and "I thinks". I will ask this, though -- have you looked into whether the 722redemption company will process a car that's 10 years old? Because I believe I've read there's a mileage/age limit for what they'll bother with.

Thanks for your input!

First, I wanted to reaffirm the car-loan but after I found out how LOW the actual value is, I decided that redemption would be the wiser decision.

"722 redemption" is the option where you obtain a loan to redeem, right? Actually, I wouldn't need any loan because the value is between $1,500 and $2,000. We could come up with that amount. I'm currently paying $300/month on that car (with almost 50% of that going to interest) so although that car is in a good condition for its age, I'd lakt to get rid of this shark-loan.

And yeah, Tamp area - my mum and I were in the Real Estate business - now go figure why I'm posting here..

[freshstartfl]

oh, clap clap! Tampa Bay, eh? Just noticed that. Lots of us on here, it seems.

[freshstartfl]

Welcome to the forum! Sounds like you've been doing a lot of homework and preparation for this. I'm not 100% positive on your questions, so I'm not going to answer them based on hunches and "I thinks". I will ask this, though -- have you looked into whether the 722redemption company will process a car that's 10 years old? Because I believe I've read there's a mileage/age limit for what they'll bother with.

[IBroke]

Hi Folks,

First of all, great to be with you! Seems I found the right place to prepare myself for my CH.7!

Now here's my problem:

7 months ago, my mother and I got a joint car-loan at one of these "buy here, pay for an eternity" dealerships. I decided to file for BK Chapter 7 and redeem the car. The balance of the loan is $7,000 and the value of the 10-year old car is less than $2,000. Here are my questions:

1. CAN I redeem the car at all because the loan is less than 910 days old or does this only apply to Chapter 13 cases?

2. Is retail- or trade-in value used to evalute the required redemption-amount? I was thinking about driving the car to a CarMax and get a trade-in appraisal from them since I read on a different site that KBB- or NADA-sources wouldn't be as current and might reflect a better market than we actually have (and so, higher values).

3. Is it true that my mother, the co-signer, will be off the hook if I redeem the car or will she still be liable for the money the creditor is short?

4. In case there is an expert on credit-reporting on this board, will there be a negative impact from this account after I have redeemed the car? So far, I never mssed a payment and it's a positive tradeline. Does FICO calculate a reedemed included in Bankruptcy different than a paid-off account? Would the remark "IIB" actually cost me some points (maybe through a hidden reporting-code) or is there only a different REMARK on the account?

5. My mother is going to file Chapter 7 as well - just a few months later. Is there anything I have to consider in regard to the auto-loan (Do I have to continue payments to avoid a late-payment on HER report until SHE files or will my filing and redemption take care of her responsibilities as well?)? I assume the car would show up on her report as paid WITHOUT a remark of BK on that account if 3. will be answered with "YES".

WOW, so many questions in my first post..

I would ask my attorney but I don't have one - too expensive for me..

Thank You very much in advance for ANY help!