Vehicle Repo

[kansasgirl]

Our CH 7 bankruptcy was discharged in August. We did not reaffirm DH's gas guzzling SUV. For a while he was still making voluntary payments or the "ride through option", but realized we really couldn't afford such a high monthly payment plus the cost to fill it up. So we stoped making the voluntary payments in September. Our insurance company offers insurance rates for "stored" vehicles, so that is what we placed on the SUV - just enough insurance to cover it while it sat in our driveway. Also, our tags were up for renewal in November, so we just let it expire.

Finally, Wachovia has repoed the vehicle. I called to verify that it had been repoed. You never know, it could have been stolen & wanted to make sure they had record.

One more thing off our minds!

[kansasgirl]

Received notice of intent to sell property from Wachovia yesterday. The notice indicates the vehicle will be sold at a private sale on 12-14-2009. Also indicates that we could get the vehicle back before the sale date if we pay full amount we owe plus their expenses.

Not going to happen! We owe close to $14,000 on this SUV & it is worth $6,000 - $8,000 at the most because it has been in an accident (ins. repaired), needs new breaks, needs new y-split going from muffler to tail pipe, the needle & electronic indicators (on the dash) that say how much gas is in the tank don't work, and the vehicle barely runs w/o stalling.

The notice also indicates that if there is a deficiency after sale, we will still owe UNLESS protectd under bk code - we are since we included this vehicle & didn't reaffirm.

The notice also has a disclaimer indicating the notice is not an attempt to collect the debt.

[JustFileSuit]

[QUOTE=kansasgirl;357036]

The notice also indicates that if there is a deficiency after sale, we will still owe UNLESS protected under bk code - we are since we included this vehicle & didn't reaffirm.

In theory, yes.

However (and there is always a "however") you have a counter-argument: they cannot just "give it away" and then come after you for a balance. the lender will take the posture that it went to an 'auction" and that an auction sets the value of the goods. Only partly true; it presupposes that there is a fluid and large market for the auction. BUT, today, buyers are scarce, as typical buyers - car dealers - are getting squeezed and their bank operating loans are cut or vanished.

Because you have not maintained it, you have some exposure. Conversely, the lender has to make some reasonable efforts to realise full value, including for example offering it for sale on a bulletin board at the bank. If all they do is run it through an auction, where buyers are limited (public not allowed) and the auction market is seized (no credit?), you have a bit of wriggle-room if they make a claim later. Just be sure not to keep your bank account there or they will do a "cross." See other poses for how that works.

[kansasgirl]

[QUOTE=JustFileSuit;362143]

In theory, yes.

However (and there is always a "however") you have a counter-argument: they cannot just "give it away" and then come after you for a balance. the lender will take the posture that it went to an 'auction" and that an auction sets the value of the goods. Only partly true; it presupposes that there is a fluid and large market for the auction. BUT, today, buyers are scarce, as typical buyers - car dealers - are getting squeezed and their bank operating loans are cut or vanished.

Because you have not maintained it, you have some exposure. Conversely, the lender has to make some reasonable efforts to realise full value, including for example offering it for sale on a bulletin board at the bank. If all they do is run it through an auction, where buyers are limited (public not allowed) and the auction market is seized (no credit?), you have a bit of wriggle-room if they make a claim later. Just be sure not to keep your bank account there or they will do a "cross." See other poses for how that works.

I'm not sure I understand what you mean, can you explain?

We included our SUV in our CH 7 BK. We are discharged, not closed. We did not reaffirm the loan for this SUV as the payments were very high & we were not sure we could continue to afford the payments. We did a "ride through" & paid a few months of payments to Wachovia, but we could no longer afford to make the payment. Our attorney told us that if we did not reaffirm, we could walk away & not owe Wachovia the difference.

My DH was very good at maintaining the SUV over the years. It just recently started acting up like it was going to stall/stop running, & we could not afford to get it fixed. I was just stating that if anyone wanted to buy the SUV at the auction & ran the VIN number (like Car Fax or something) they would see that it had been in an accident & if they were still interested in buying it they would see that it also needed other repairs. So there is no way Wachovia is going to get $14,000 for this vehicle at auction.

[JustFileSuit]

Here is how I construct your situation. You had the SUV on finance, then you went into a Chapter 7. Now a 7 is a "liquidation" whereby your secured assets go back to the secured party (unless you "reaffirm" the debt or some other arrangement is made outside the BK Petition). You did not agree to a reaffirmation and they did not offer you a unilateral deal on their own accord. Now the "7" would customarily discharge any liability you would have for a deficiency. The "7" also discharges the contract, and since you do not have title, you have no rights to the SUV. I would suggest that if you had paid all the payments, you still would have no right to the title, absent some other Agreement. Your payments would be just rental payments.

BUT, and it is a big BUT, you did not surrender the auto. Now you left it in the driveway, and Wachovia "could" have trespassed onto the property without breaching the peace to take possession of it (assuming you did not park another auto behind it so a tow truck could not get at it), and you continued to make payments, what you describe as a "ride through." You ended up with possession and use of the SUV after the BK Discharge (which is the only date that is relevant). Meanwhile there are mechanical (and collision) problems that have taken place. Is the creditor harmed by your actions? Maybe, maybe not ... [He probably is.]

If you had simply surrendered the SUV during the BK Petition time, prior to discharge, or if they had asked you for it, you would be out from underneath. But you did not do that. Is the creditor harmed by your actions? If so, they "could" have Motioned the Court for Relief from Stay (on the grounds that their position was being harmed) but you nipped that one in the bud by making some payments (your "ride-through"). However (and there is always a "however"), you did not undertake reasonable efforts to maintain the SUV, all you did was keep it insured against loss. The SUV is now deteriorated. It will bring less, probably (by your reckoning) quite a bit less. Are you liable? "Maybe, maybe not..."

They are going to bill you for the deficiency. You will take the position that you are relieved from the deficiency by virtue of a Discharge. They will "probably" do nothing further. But they "could," or "might," make a claim against you for the loss by virtue of your failure to maintain the asset and your failure to surrender the asset. Will they, as a practical matter, press the issue in the face of a BK discharge? Probably not. Could they, if they really wanted to? Probably, yes. When you muddy the waters, then it remains muddied for both you and the bankers.

Don't let this ruin your Christmas. They "probably" will just do nothing other than send you a deficiency notice (and maybe put it on your credit report, but for that, you don't care anyway). Odds are it will just go away. If it goes to collection, just tell the collector that you have a discharge of the debt in bankruptcy. Those guys will "probably" not be looking to nuances like I have outlined above.

For everybody else, my words of advice: either you turn it in, or you keep it and pay for it, but if you do that, then be sure to keep it insured, repaired, and maintained. You do not want to be in the position of being accused of laying waste to an asset belonging to others. Depreciation is one thing (offset by your continuing payments); damage is quite another.

[DebtEnder]

I had one car I that I gave back in my 7. The bank was aholes and would not even talk to my attorney about working out a deal on it at all. It was left as dirty, if not moreso then it ever was. They got it and now 5 months later I have heard nothing on it.

I had another car I did not intend to keep but since the other one went poorly I made a deal for a little under half of what was owed and got the title, after my case was discharged and closed.

A 3rd car I just kept paying on for a month or so after discharge and have the title for it now as well. I was almost paid in full when I filed. It did help keep my DMI down so that was nice

As long as you make the payments you will in time get the title to a house/car/whatever. It does not become "rent" or a lease.

You did not reaffirm the debt so aside for GROSS misconduct regarding the car/house there is nothing they can do beside take ownership of the property and sell it for whatever they can. However as stated they do have to sell it at fair market as best as possible and if some by some chance it sells for more then you owed on the note then they would have to return any excess to you.

[JustFileSuit]

[QUOTE=DebtEnder;362293]

As long as you make the payments you will in time get the title to a house/car/whatever. It does not become "rent" or a lease.

I would submit that you were "just lucky" and the lender employee just did not figure it out. Here is how I see it: the BK Court has vacated your contract obligations. You do not get to keep "the benefits" of a contract when you dump "the obligations" of that contract. The "benefit" is the ultimate transfer of title. If you dump the contract in bankruptcy court, then you dump the possibility of eventual ownership. that makes you payments "rent," or perhaps more strictly, "use and occupancy." Just because Debt-Ender's lender employee was so used to forking over the title after the last payment should not be taken to imply that this will be the customary outcome; DebtEnder got lucky! (You might, too, but that is not a certainty.)

[logansdad]

[QUOTE=JustFileSuit;362436]

I would submit that you were "just lucky" and the lender employee just did not figure it out. Here is how I see it: the BK Court has vacated your contract obligations. You do not get to keep "the benefits" of a contract when you dump "the obligations" of that contract. The "benefit" is the ultimate transfer of title. If you dump the contract in bankruptcy court, then you dump the possibility of eventual ownership. that makes you payments "rent," or perhaps more strictly, "use and occupancy." Just because Debt-Ender's lender employee was so used to forking over the title after the last payment should not be taken to imply that this will be the customary outcome; DebtEnder got lucky! (You might, too, but that is not a certainty.)

what rock did you crawl out from under with all of your savy legal advice and just joining ???

[kansasgirl]

JustFileSuit-

Thank you for the reply. All I was doing was updating the forum by posting what has happend so far in our situation, so that others may benefit. Not all BKs or surrender of vehicles are the same. BUT, don't get me wrong, I do understand your point of view.
Below is a more detailed time line:

January 2008 - Accident w/ SUV (DH hit a wall on highway), no other cars involved & no damage to frame. Insurance pays for repairing vehicle (minus deductible). Looks brand new. Have receipts, copies of checks from insurance, and records from repair shop to prove this. Kept making payments to Wachovia, kept full coverage insurance, kept meticulously maintaining, kept driving vehicle.

January 2009 - DH lost job. Kept making payments to Wachovia & other creditors by depleting savings, 401k, etc.. while DH looked for job. Kept insurance, & kept maintaining vehicle, kept driving vehicle.

April 30 - Filed CH7 BK. Included the debt to Wachovia, & marked "reaffirm" on statement of intentions. DH has found new job. Kept making payments to Wachovia for SUV, kept full insurance, kept maintaining vehicle, kept driving vehicle.

May 28 - Attend 341 meeting. Decide (upon attorney's advise) not to sign the reaffirm papers Wachovia sent & attorney sends page back to Wachovia that says not reaffirming. We also called Wachovia & verbally told them we were not reaffirming but would still make payments as agreed (or "ride through"). Kept full insurance, kept maintaining vehicle, & kept driving. Wachovia was ok with that, as long as payments were made on time & insurance was kept.

June till August - Kept making payments (or "ride through") on time, kept full insurance, kept maintaining vehicle, & kept driving.

September - Realize that we are still struggling to make ends meet even though we have filed BK. Realize the payments to Wachovia for the SUV are just too high. Realize that we are constantly filling up with gas. DH tries to find out why vehicle is all of a sudden using more gas than before & finds gas gauge is broken as well as all electronic displays of gas mileage, etc. DH attempts to get this fixed (have receipts). Call Wachovia to let them know we have change our minds and want to surrender SUV & they tell us they will make arrangements to pick up vehicle. Did not make September payment, but kept full coverage insurance, kept maintaining, kept driving. BK was discharged on Sept. 15.

October - Did not make October payment. Wachovia still has not picked up vehicle. Call them back & they see on their notes we had called in September too. They tell us they will be picking up the vehicle soon. DH purchases a "new" car. We park SUV in driveway, but kept full coverage insurance on it & maintained.

November - Did not make November payment. Wachovia still has not picked up vehicle. Call them back again & they see on their notes we had called in September & October. They tell us they will be picking up the vehicle soon. Find out from insurance company that they offer lower insurance rate/coverage for "stored" vehicles so we change the coverage for the SUV. SUV is still parked in driveway, let the tags expire, but kept maintaining.

December - Wachovia finally picks up vehicle. Sends us the notice of intent to sell.

Now I don't know if it makes a difference that the accident took place more than a year before the BK & it was repaired. But, I assume that if any dealer tried to purchase at auction & ran VIN number they would find out it had once been in an accident. Just like if this dealer tried to sell after they purchase from auction & new buyer wanted to see a Car Fax, they would know it had once been in an accident. As far as the other problems with the vehicle, DH did maintain it clear till the end & did try and attempt to fix the problems with gas gauge, etc.. (receipts to prove). So we do not see this as a GROSS misconduct.

[JustFileSuit]

QUOTE]December - Wachovia finally picks up vehicle. Sends us the notice of intent to sell.

Based on that timeline, Wachovia as lender has only themselves to blame. No fault could remotely be ascribed to you.

Now I don't know if it makes a difference that the accident took place more than a year before the BK & it was repaired.

Nope. You are in the clear. They can have NO complaints!

But, I assume that if any dealer tried to purchase at auction & ran VIN number they would find out it had once been in an accident. Just like if this dealer tried to sell after they purchase from auction & new buyer wanted to see a Car Fax, they would know it had once been in an accident.

that would be their "problem." A properly repaired vehi8cle is treated the same as an unaccidented vehicle; it is to be expected that an auto is subject to accident damage (nature of the beast! ).

As far as the other problems with the vehicle, DH did maintain it clear till the end & did try and attempt to fix the problems with gas gauge, etc.. (receipts to prove). So we do not see this as a GROSS misconduct.

What you describe is not gross misconduct; it is not misconduct of any form whatsoever. Your conduct with the auto is without blame. It is not your fault that the SUV went screwy with the wiring; that is either poor design, poor components, or just old age. You are totally off the hook. No worries here, matey!

To sum up: your approach to this auto problem was much better behaved than Wachovia would be experiencing with the typical bankrupt. You offered repeatedly to turn it over and they ignored you. what else could you have done: drive it to a bank branch and park it in the drive-through lane? (and NO, anybody out there who is tempted, do not do this.). If it starts conking out long after you offer it to them, hey, that is a functional derivative of their own negligent actions (or inaction, which is negligent).

I regret that I misconstrued what you had done. I would argue cogently that what you did, in preserving the asset long after your responsibilities ended for it, went beyond the call of duty. they should be happy you kept it guarded and insured!

[JustFileSuit]

[QUOTE=logansdad;362446]

what rock did you crawl out from under with all of your savy legal advice and just joining ???

Chalk it up to having very, very smart parents (both Ph.D's) and a very expensive prep school education and a very expensive Ivy League college. And then chalk it up to entanglements with lawyers starting at age 20 and continuing through 8-figure lawsuits for the next 40 years. It is quite impossible to go through life today doing interesting things without ending up in tussles in courtrooms. You would be surprised how much "on-the-job" learning you do that way! (Just get sued for $15 million in damages and defeat the other side and you find out what I mean(!)).