Can they take my car?!

[zem930]

Ok new guy on the block here. Getting geared up to file BK in the next month or so. Just got a certiifed letter from one of the banks i owe money to. Actually it's a credit union. I have a credit card that I have not paid on since December. I also have a car loan from them that is all current(I need my car). The car loan is cosigned by my wifes father. My question is can they take the car from me??? I want to include the credit card in the BK but not the car which im still paying on and plan to pay on. Please help!

[nerves]

Since you are current on your car, I don't think they can take it. You can include your cc in your bk and that should remove your responsibility from that debt. However, you will need to find out how the CU handles bk and car loans. Some require a reaffirm agreement and others allow for a ride through. If you do a reaffirm, you will be responsible for the debt post bk (they can file a deficiency and require you to pay the excess value after sale of the vehicle if you stop payments and they repo). A ride through allows you keep the vehicle as long as you continue payments, however if you stop or are late with a payment, they can repo it and you will not be liable for the remaining balance.

You didn't mention the value of the vehicle and how much you owe. Keep in mind that each state has an allotted exemption. If you have more equity in the vehicle than your state exemption, that may create another issue. However, trustees are usually pretty good about working out a deal for you to pay the excess amount to them over time/payments.

[keepinitreal]

I'm in a similar situation with my credit union. If your credit union added a cross-collateralization agreement to your car loan when you signed it, you won't be able to separate your credit card debt from your car loan. Also, your father-in-law will be liable for this entire debt because he co-signed for the car loan.

Get free consultations with attorneys to discuss what you should do at this point. Good luck!

[zem930]

Thanks this has been helpful!

Well the credit card came before the car loan if that makes any difference. The car is probably worth $14,000 and I owe $12,000 on it....

[justbroke]

You should determine if the car loan is cross-collaterized with your credit card(s) and other share account(s). This is the standard way Credit Unions protect themselves. You may be able to ask that the cross-collateralization of the credit card(s) and the car loan be removed.

[GoingDown]

Jeez, you owe a lot for that car. Let it go, and start over with Bankruptcy.

Get a used car you can just cash out and not have any monthly payments.

[zem930]

^^^lol it is a used car it gets 30 +mpg and its in great shape. $12K isnt a lot at all

[GoingDown]

^^^lol it is a used car it gets 30 +mpg and its in great shape. $12K isnt a lot at all

Then you're paying too much for a used car.

I bought a 2003 Ford F-150 for $4,300 and it runs great.

[jwmc1]

Credit Unions are notorious for have cross-collateralization and cross-default provisions, which in short means that means you being current on you car loan means nothing. If you are late on one than you are late on both. If they are going to collect on one, they are going to collect on both. The collateral for one, is collateral for both. I obviously have not seen your loan documents, but if it is what I think it is, then yes, theycan take your car.

[Exployer1234]

Can you work out something with your father-in-law where he is the sole owner and you make payments to him? That way if you do BK the credit union will not repo the car and then sell it leaving him with the remaining balance.

[jwmc1]

Can you work out something with your father-in-law where he is the sole owner and you make payments to him? That way if you do BK the credit union will not repo the car and then sell it leaving him with the remaining balance.

That will not work. The debt is connected to the collateral, the ownership has nothing to do with the underlying obligation.

[StartingOver08]

Some CU's will allow you to remove the cross-collateralization if you reaffirm the car. Mine did. I dumped my second mtg and a cc with the CU and kept the car by reaffirming it. However, in the reaffirmation agreement I had them specifically remove the cross collateralization and some other things (reduce the payment etc).

Having said that, you are in a slightly different position because your FIL has co-signed so he is responsible for the car payment anyway if you default. You are between a rock and a hard place because the car debt will either be paid by you or your FIL. If you surrender the vehicle in your BK, then your FIL will be responsible for the deficiency.

[dscurlock]

Thanks this has been helpful!

Well the credit card came before the car loan if that makes any difference. The car is probably worth $14,000 and I owe $12,000 on it....

If i was buying it off these numbers, then I would offer $8k for it.
What it is worth, and what it will sell for are two totally different
figures...a home maybe worth $100k, but may only sell for $75k
this is not the greatest economy right now for asking the full
worth value of anything...and if you are paying full value on
any large ticket items these days, then you do not have
any financial problems that I can tell, and I am not refering to you...

If you had not used another co-signer, I would BK everything,
including the car, but this will affect his credit also. I found my
last two vehicles on craigslist, and I have had no real issues
with them at all...and one was a Grand Caravan for $2,000
runs very smooth...with my luck it will break down tomorrow