Decided to File....now what with the cars?

[Strapped4Csh]

Sorry in advance - I realized this got a bit long winded after I typed it....

We had our initial consultation with what will end up being our atty to file chapter 7 (this was not the first one we met with, but took the most time to explain things to us, and was very friendly. He's a member of NACBA, so I figure that's a start).

Our biggest question mark is the cars. We have two very decent vehicles - a 2007 Odyssey with about 30,000 miles, which we'll own after another 58 payments of $640 due. 722 Redemption with US Bank looks like an option to lower that a bit - Mid $500s, which we can afford, but I'm not sure we want to. The car books for about 18K (there's some body damage, which drives it down, but mechanically sound, and we have a 100k warranty on it). I also leased a 2009 accord for $345 a month, with 32 payments left. We can buy out at the end for $12k. Both vehicles financed through honda finance. I should note that we're current with the accord, and one month behind on the van (another payment is due on Aug 1st, so we'll be behind 2 soon).

Ultimately, I think we want to come out of this with one payment, So having said that, I have a couple questions:

Has anyone done a 722 and successfully refinanced afterward?
Has anyone purchased a different vehicle with 722 and how was that experience overall - what kind of dealerships are you dealing with (are they shady operations, or pretty up and up places - I have a feeling they're the former).

Finally - If I let the van go without paying, how long until I can expect them to think about repo'ing (That will determine when we file). I gather I can get another month or so after I file before they get relief from the automatic stay...

[daedalus]

As far as repo goes, we stopped paying on my DH's truck for about three months before they came to get it. Not sure about 722 redemption companies, but my lawyer says in her experience, negotiations breakdown between the original lender, the 722 lender, and the debtor, because the 722 lender tries to drive the value of the vehicle up to collect more in interest over time or push the debtor into purchasing one of their cars instead.

[aces67]

As for repo- It can take a while. Once you file BK the car lender has to file for relief of the automatic stay before they can even try to pick up the cars.

As for the 722 I tried to go that route but there are certain states that they are NOT licensed to do business in and mine is one of them.

[debtmonster]

Hopefully my lawyer will fight the relief of stay and I will keep my cars for a very long time after the discharge. I need to keep these cars for as long as possible so I can save up $10,000 to $20,000 to use as a down payment on 2 new cars. I'm not doing this $0 down crap anymore. From now on I don't ever want to be upside down in a new car again. I learned my lesson BIG TIME.

This time I don't want to finance any more than $7,500 to $10,000 total. So that means I will need to put $7,000 to $10,000 down on a $17,000 to $20,000 car.

The longer I can keep my cars after bankruptcy, the more money I can save up. I don't recommend that anyone pay more than $300/mo. on a car payment. That's simply insane to pay $500+ on a car. I know, because I did it. And it was VERY DUMB.

You guys need to downsize, BIG TIME and stop thinking about $30,000+ vehicles. Live within your means. Buy Hyundai's or Kia's if you must.

[Strapped4Csh]

DM

We were living within our means, when both of us were working. Unfortunately, a 60% reduction in income (my wife lost her job) back in Feb, combined with a forced relocation to keep my job, and finally tenants renting my former home that decided that I was at the bottom of their list of accounts payable has put me in the position I'm in. I too would not consider buying a new car (at least with no money down) - I've learned a lot about a lot of things from this experience. I know what I have with the cars that I'm in now, and if I can get one of them for what they're truly worth (not what I have left on the loans, and not retail on the lot), then I would be in decent shape. For me, I'd rather put an extra few hundred bucks into keeping a car in the long term than paying my attorney $100+ an hour to fight to keep them for the short term.

The biggest issue that we have is we'd love to get a more economical car, but it's not exactly easy to get a loan for even an inexpensive car when you're already behind on your bills and have two vehicles financed, compounded with income that doesn't meet expenses. So, if I can keep the car I have, knowing that I have done all the required service and such, and cut the loan balance by roughly 40%, it might make some sense to do that. I've got a decent rate (5%) on the loans I have now, so how much car can I get at that kind of payment, given my credit situation and the fact that my next car loan won't drag out for more than 36 months (it just doesn't make sense).

I suspect that since you're here, you can probably relate to my situation on some level, which I'm sure is the situation that many of us here are in. I think we all know we could have done something different. We thought we were doing everything right - when my wife lost her job, we had almost enough money in the bank to cover six months of her salary. We were saving on a pretty regular schedule, making payments ahead of schedule. We now see that wasn't enough.

[LuciluS]

We were rear ended in an auto accident on 3/14/05. I was an Accountant before the accident. I finally received my Disability from Social Security by an Administrative Law Judge in 7/06.

I guess between the accident & my Dh being off work for 7 1/2 months in 2007 for 5 bypass surgery & pacemaker implant, I should have seen 'the writing on the wall', but I just kept on robbing Peter to pay Paul. Until last Sept. when I no longer could make the min. monthly payments on the CC's as they had raised the min. from 2% to 4% & jacked up the rates.

We met & retained our BK Attorney late last Sept. and immediately stopped paying on our Credit Cards. We thought we would be filing in 1/09; however, we were over our State Median Income and I didn't want that as you can be scrutinized by the UST. So we will be filing in 9/09.

US Bank is the leader of the 722 redemption program. Google and they should be the first to come up. I called them, but we were not eligible as our current truck loan is with them and they stated is was only for new customers.

Dh's Dodge Truck is worth less than what we owe on it; however, we are going to keep it as it is a 2007 and a good rate and we couldn't get financing on another vehicle if we tried. Our credit is Trashed. Hubby is also 6'6" tall with a size 16 shoe and doesn't fit in all cars.

I have a 99 Toyota Sienna Van which is paid for. He drives it, because it is fitted with a remote controlled lift for my scooter which I need if I'm doing any kind of walking. It's not as easy for him to drive my Van as it is his truck. Our gasoline expense is quite low. I usually go to the local bank (less than 2 miles) once a week and drive 25 miles one way each month to see my pain management doctor. Dh is an over the road truck driver & usually drives 38 miles to work on early Sun. morn and doesn't get back to the yard until Fri. evening.

We live in a very small town which has a small grocery store. Dh does all the grocery shopping and usually goes to the next city to Wal Mart SuperCenter every two weeks as it is about 16 miles one way. We moved our prescriptions late Mar. of 2008 from Wal Mart to our local pharmacy as the gas was so high back then it wasn't worth it.

I fully understand about losing income. We should have filed before I got my disability, but then we wouldn't have the home we have now, which is closer to my doctors & family by about 50 miles and a bigger home with the same $ monthly payments.

Good luck on trying to get one of your vehicles crammed down. I've heard cases of where the Trustee plays a role in such.

Luci

[debtmonster]

I'm paying 5.9% on my car now and paying $300/mo. for 72 months. I'm giving it back. It's deep underwater.

I want to put $10,000 down on a new car next year and finance it for 24-36 months.

My lawyer is not charging me extra to fight to keep the car. That was included in his $2,500 fee that he charged me. If I can keep this car for 6 months without a payment, that will save me over $1,800 right there. And if I can keep my SUV for 6 months as well, that's another $4,500 saved until we get back on our feet. Then when they can't hold out any longer and I am ordered to give the car or car(s) back, that's when I will go out car shopping.

Right now I want to wait until the 2010 models come out. I was eyeing the smart car and the Toyota Yaris. Right now the crash test on the Toyota Yaris is absolutely HORRIBLE. I am hoping this is fixed by 2010.

Yaris crash test - watch the 20 second mark and look how the driver's compartment gets crushed. If you lived through that, you could be in a wheel chair the rest of your life.

The smart car has a nice safety roll cage designed by the people who designed the Formula 1 race cars. I'd rather stick with that. Plus the smart car has stability control and for the Yaris, it's not even an option yet.