Is this possible?

[mle409]

I am currently in a ch.13 plan. I want to convert to ch. 7 and get out from under the 2 mortgages on my home but my atty says that since my cars are included in the ch.13 payment and they are not paid off, I will lose them if we convert. We need our vehicles, (both me and my child have chronic illnesses and have routine dr appts. out of town and my husband works out of town) A friend suggested to me that we file ch.7 on everything but the cars. Is this possible?

If not and we go ahead and convert and lose the cars, what can we do to get different cars?

Thanks,
Michelle

[HHM]

Your friend is wrong, your attorney is correct (to a point).

What you will need to find out is how much of the cars have been paid off and will the car companies accept a reaffirmation agreement in a chapter 7.

[hhou812hh]

I was told by my atty that even though you may have payments on both cars and may want to affirm them both, you may only keep ONE car under the law with a ch7. My atty did however say that a friend or relative can buy one of the cars for Kelly Blue Book/FMV. The trustee would get the proceeds and pay the secured note off or divide it among the unsecured creditors if there is no loan.

[mle409]

What about going through 722 Redemption Funding? Has anyone here ever done this so they could keep their vehicles when filing or converting to ch.7?

[HHM]

You can try that. The issue is determining the amount of the allowed secured claim. (i.e. how much you have to pay the creditors).

The real challenge will be getting someone to "finance" a redemption.