Has anyone paid Trustee to keep your car?

[2bdebtfree]

I have to take my state's exemptions because of the equity in my home. My car is paid off. KBB's value is approx. $3800 and my state's exemption is $700. My attorney wants me to get a letter from a used car dealership stating what they can sell my car for as is.

My attorney also said I could trade it in and buy a new car so now there would be no equity. I'm not sure yet if I can afford a car payment. I'm going to retain my attorney today. I have an appt at 4:30pm today and hopefully will go over my budget as well and pay my retainer.

My question is: Has anyone had to pay the Trustee any money to keep your car?

I'm just so worried about losing my car then I can't get to work.

Thank you.

[despritfreya]

The Chapter 7 Trustee's job is to maximize the recovery for the unsecured creditors. If the vehicle has equity over the allowed exemption he has a duty to sell it to the highest bidder. He does not care who he sells it to but it should be sold at a public sale to which you are free to bid.

Some Trustees will entertain an offer from the debtor to buy back the non exempt equity without a public sale. That is why your attorney has recommended that you get an appraisal. The less the value the more likely you can offer to buy back the equity. However the US Trustee (the Trustee's boss) frowns on this taking the position that if the vehicle is not put up for public sale there is a possibility that the Trustee won't recover the "highest and best" offer for the creditors. The Trustee's willingness to "cut a deal" with the debtor depends upon the value of the asset and his/her willingness to work around the concerns of the UST.

[Freddy03]

My soon to be attorney told me I might have to pay the trustee to keep my husband's car b/c it's paid. He said the most I would have to pay would prob be $1000 what's over the exemption. But he did say that he would try to work it that if the trustee takes our tax return maybe they would leave the car alone.

Good Luck!

[2bdebtfree]

Thank you. I realize that I may have to pay him some money. I don't want them to take the car. How can I get to work to pay my mortgage, feed the kids etc. I know my attorney will answer when I go see him this afternoon but I'm just freaking out right now.

I guess in a few hours I will know the answer.

[Freddy03]

If it helps any he told me I could make payments up to 6 months if I have to pay.

[2bdebtfree]

Thank you Freddy. If I have to make payments so be it. But I can't have them take it and I have to bid on it. I'm still trying to get letters from used car places saying how much they could sell it for as is.

Figures, I was in an accident in June and the insurance fixed it. No dents and body shop fixed rust on hood. Now it looks good. I should never have fixed it then it would have been worth less. And I just bought new tires for it as I was filling up two tires every other day. uuuggghhh.

Hopefully after the meeting today I'll feel better.

[2bdebtfree]

Freddy,

You haven't filed yet. So your waiting also. I'm waiting to file in December. I'm going to retain my attorney today so I don't have to deal with any phone calls. I think that would put me over the boiling point.

My car is worth approx $3800 and the exemption is $700 so I would have to pay $3100. I guess it is what it is.

[Freddy03]

Freddy,

You haven't filed yet. So your waiting also. I'm waiting to file in December. I'm going to retain my attorney today so I don't have to deal with any phone calls. I think that would put me over the boiling point.

My car is worth approx $3800 and the exemption is $700 so I would have to pay $3100. I guess it is what it is.

I'm going to pay my retainer fee next week and hope to file on 10/8.

[maddog2112]

I wonder if your lawyer is missing something. I don`t know how my lawyer did it, but I had 10k equity on one of my cars, and my 2nd car was paid and worth 4500. I think there was some sort of household total of assets amount and he was able to put it in there somehow. It`s hard to remember now it`s been awhile. Nothing was ever said or questioned by the trustee.

[Dax]

Hi - My first post here (I think), but I've been lurking for a long while and have gotten some great info here (thanks to you all). I finally found somewhere that I can offer info.

I filed Ch. 7 on 6/21 and had my 341 on 7/27. My car was paid off and I had equity in it. Long story short - my attorney offered $2,300 for me to "buy" back my car -- Trustee accepted. My terms are $500 down (which I've already sent in) and $200 a month for 9 mos. until paid off. Fair enough since I needed to keep my car. Burns me a bit that I have to pay for a car that I've already paid for, but a small price to pay to dump the rest of my debt!

My understanding is that I'll get the discharge after 60 days (fingers crossed!) but my case won't actually close until I've met the terms of my payment agreement with the Trustee. Also, no penalty for early payoff or extra payments -- I checked!

Oh, this is northeast Ohio if it matters.

Best to you!

Dax

[Freddy03]

My understanding is that I'll get the discharge after 60 days (fingers crossed!) but my case won't actually close until I've met the terms of my payment agreement with the Trustee. Also, no penalty for early payoff or extra payments

This is what I was told also

[drowning123]

Let me ask y'all somethin'. So, I owe 11,000 on my car. It's probably worth 9,000. Do I have equity?

[Exployer1234]

Let me ask y'all somethin'. So, I owe 11,000 on my car. It's probably worth 9,000. Do I have equity?

Nope you do not have equity then. You are upside down by just 2000 though. meaning you owe more then what the car is worth.

[ferfermom]

I'm curious about this also. My car is KBB valued at $13,700, I still owe $7,500. I live in Washington State. How much equity do I have then? My attorney also said we most likely could pay trustee to keep car, but he never said how much. We are signing Sept 13 .

[Exployer1234]

If the car is valued at 13,700 and you only owe 7,500 then you have equity of about 6K. What you want to find out is what your interest rate on the loan and what the actual payoff is on the loan. If you owe 7500 then part of the payment you pay each month goes towards interest and part of the payment goes towards actual payoff. If your payments are 417 a month and you have an interest rate of 11% then each month you are paying 130-140 in interest. The other part is going toward the balance. So how much you owe does not change, but it will effect how much equity you actually have in the car. If the car is 13.7 and you have about 7.5 left then subtract how much of the interest is left on the loan. Now subtract that number from 13.7 and that is how much equity is left in the car that you have.

Example
13700 car value
7500 loan amount
15% interest left on the loan 1125
6375 is the principle balance left on the car
13700-6375 = 7325 in equity is what you would have on the vehicle.