Redemption of car and no lawyer

[Sariah]

Have a question about car redemption. No lawyer and my 341 meeting is scheduled.

My car loan for 12k. I initially wanted to give up the car bankruptcy. However, I am having second thoughts now and I am looking at redeeming it.

Do I get the car appraised for the FMV and if so by who and how do I present this appraisal in the bankruptcy? If the courts/trustee/banks whoever.... if they strictly go by the KBB FMV then I will not consider keeping the car as I could not afford to. I am hoping that since the car is not in good physical condition from an accident and there are some other costly things to repair that they would also consider this.

Thanks.

[daylate]

If there is a CarMax in your area see what they would offer you. If they won't offer because of the condition then ask them to note it in writing. If there are no CarMax's are you using poor or fair in Kelly Blue Book to value your car? If the car is ultimately determined to be worth more than your loan then you have equity in it and the trustee could take it. if you are underwater on the loan, then you could always consider not reaffirming and just keep paying. Lots of stuff on the forum about "ride through" situation. Do a search and see what you find. Good luck.

[Sariah]

Carmax offered me 4k. I currently owe 12k. I would now like to buy this vehicle for 4k with the help from my parents.

My question is how would I go about changing my bankruptcy paperwork from initially wanting to give up the vehicle to now wanting to buy it for 4k? Do I call up the finance company and make an offer of 4k?

My 341 is next week.

Thanks,
Sariah

[btbeme]

You have two real choices - surrender it in the BK, or reaffirm the loan in the BK and pay the $12,000 balance due. You can try calling the finance company and asking for a redemption, but those seldom happen on that large of a disparity. Not that is does not happen, but it is only a small chance that it will work. And, if you receive $4000 from your parents before filing, well, the Trustee will make sure that you claim that as income, etc.

A third choice would be to purchase a different car for $4,000 and surrender the first. If you borrow the money from your parents, you can reaffirm the loan to them or just do a ride-through. But, the title and lien would have to be perfected before your 341 hearing, so time is almost up.

Best bet - in my opinion - surrender the car and buy another after they come get it after your discharge.

[Dorsey]

You have two real choices - surrender it in the BK, or reaffirm the loan in the BK and pay the $12,000 balance due.

You NEVER want to reaffirm a loan for the amount due. You want to reaffirm the loan at the market value of the car if it's lower than what's owed. There is no reason why a debtor should reaffirm a loan for $12,000 on a vehicle worth $4,000. If the loan company is aware (via an appraisal) that the car is only worth $4,000 and that they could only sell it for that if they repossessed it, they will reaffirm for something close to $4,000 if you are (or can quickly become) up-to-date on any late payments.

[Pandora]

I am hoping that since the car is not in good physical condition from an accident and there are some other costly things to repair that they would also consider this.

Thanks.

if the car needs repairs and was in an accident... then let the bank have it. Paying $12K for a car that needs work let alone $4K - is ridiculous, especially since you can get brand new cars for that price - not to mention awesome used cars for half of that that have been well maintained and need minimal things done (i.e., oil change, tires rotated). Unless you have the $ to fix the car upfront even if able to purchase it back for 4K.... walk away from it.

As someone else pointed out - if you get your parents to lend you the money and purchase a used car, make sure they perfect the lien and submit a claim. If they dont and they purchase it outright for you, putting it in their name, you cannot claim expenses for it and insuring it will be a bear.

[malf1204]

You can simply file a MOTION to REDEEM with the court. This must be done before discharge. If the lender does not respond you win by default. Search motion to redeem on the internet. ATtache the carmax offer and file it with the court.