Car payments & CH 7

[ccsjoe]

We hope to filing CH7 soon. We are only this month starting NOT to make cc payments. We do have a car loan with FMC that will be reaff'd. We will continue make the FMC payments ($519/month) through filing, so if we file in 1 month it'll be less than $600, but 2 months we will pay more than $600 to a single creditor. However, because it is a secured loan that we are declaring reaff in SOI, will it be looked at differently from the requirement of not paying more to a single creditor than $600 in last 90 days? Also what happens if we continue car payments during the entire bk process?

Thank you

[keepinitreal]

Yes, you're correct that the $600 limit does not apply to secured loans. So, you should continue car payments through the entire bankruptcy process.

[ccsjoe]

Thank you!!

[tcreegan]

option to reaffirm

Hello ccsjoe,

A much better solution to reaffirming a car loan is to mark reaffirm on the statement of intentions but do not sign new papers with FMC and keep making payments on time. You are not legally liable for the debt, so you can walk away later if things change.

Caveat: from what I have read on the forum, FMC does not like to do this on higher $$ loans. However, you may be protected by state law. Check w/ your lawyer.

Tom in Colo

[ccsjoe]

Tom, appreciate the input. Glad you caught yourself with FMC. There is no other option with them but to reaff unless it's a very low vehicle/loan value. Unfortunately mine is a 2010 with barely 9K miles, KBB 22K, loan 29K. I did previously speak with my attorney AND FMC directly about this. So far, no contradictions. Attorney won't even charge me to sign reaff as "there is no negotiating with FMC" as he put it.

[tcreegan]

Fmc

ah, yes, FMC is featured in many posts....

But....I read another post saying that in CA, if you keep making payments they cannot repo your car. This would be state level consumer protection law.
Something to ask about maybe...?

Tom in Colo

[blockhead]

ah, yes, FMC is featured in many posts....

But....I read another post saying that in CA, if you keep making payments they cannot repo your car. This would be state level consumer protection law.
Something to ask about maybe...?

Tom in Colo

That's true in MA and probably some other states as well.

[ccsjoe]

Not CA, attorney said reaff or repo...as I said, he's not even charging me for the reaff since all he's gonna do is sign & file, no negotiating involved

[liz417]

I'm in Calif and didn't reaffirm either of my cars, I just continued paying. My attorney told me that MOST loan companys will let you do a "ride through", but there are a couple (Ford Motor and can't remember the other one) that insist on reaffirming or they'll repo the car.

[Clouddancer]

And how can they legally repo your car if you pay ontime?