hello group.

i have been told that if you file a ch. 7 bankruptcy and have an auto
loan, you can keep the car, but only owe a lesser amount than your
current loan.

for example, let's say i have a car with a loan of $15000 on it. the
book value is only $10000. the way it was explained to me is that you
can discharge the $5000 extra that you owe and then only have to pay the
$10000 that the car is worth at the time of your bankruptcy.

am i missing something here? this seems like it is too good to be true
if you are in the position to have to file for bankruptcy. can someone
clarify this? also, is it up to the lender on whether or not they will
lower the amount that you owe?

thanks

I think you are probably confused.

If you owe $15,000 on a car and if your car is auctioned off at the
values of $10,000, you will still owe your creditor $5,000 dollars
after the repo during your bankrupcty. The amount of $5,000, however,
can be discharged during your bankruptcy.





question <pleaseanswer@home.com> wrote in message news:<3F32F292.2010302@home.com>... hello group. i have been told that if you file a ch. 7 bankruptcy and have an auto loan, you can keep the car, but only owe a lesser amount than your current loan. for example, let's say i have a car with a loan of $15000 on it. the book value is only $10000. the way it was explained to me is that you can discharge the $5000 extra that you owe and then only have to pay the $10000 that the car is worth at the time of your bankruptcy. am i missing something here? this seems like it is too good to be true if you are in the position to have to file for bankruptcy. can someone clarify this? also, is it up to the lender on whether or not they will lower the amount that you owe? thanks

What you are describing is a redemption. This is solely at the creditors
discretion.

Glen Hughes, CPA
www.glenhughescpa.com
"question" <pleaseanswer@home.com> wrote in message
news:3F32F292.2010302@home.com... hello group. i have been told that if you file a ch. 7 bankruptcy and have an auto loan, you can keep the car, but only owe a lesser amount than your current loan. for example, let's say i have a car with a loan of $15000 on it. the book value is only $10000. the way it was explained to me is that you can discharge the $5000 extra that you owe and then only have to pay the $10000 that the car is worth at the time of your bankruptcy. am i missing something here? this seems like it is too good to be true if you are in the position to have to file for bankruptcy. can someone clarify this? also, is it up to the lender on whether or not they will lower the amount that you owe? thanks

Actually, you are kind of correct. This is what happens in Chapter 13. This
is what I did and kept both my cars.

"question" <pleaseanswer@home.com> wrote in message
news:3F32F292.2010302@home.com... hello group. i have been told that if you file a ch. 7 bankruptcy and have an auto loan, you can keep the car, but only owe a lesser amount than your current loan. for example, let's say i have a car with a loan of $15000 on it. the book value is only $10000. the way it was explained to me is that you can discharge the $5000 extra that you owe and then only have to pay the $10000 that the car is worth at the time of your bankruptcy. am i missing something here? this seems like it is too good to be true if you are in the position to have to file for bankruptcy. can someone clarify this? also, is it up to the lender on whether or not they will lower the amount that you owe? thanks

> During the BK, even if you miss one single payment, your car will be
repoed immediately without any warning.

No, they cannot. This would be a violation of the automatic stay,
and would subject the creditor to serious penalties. They must
file for and obtain a Motion for Relief From Stay before the car
can be repossessed.

--
Brett

************************************************** ***************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* lawyer@erols.com *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
************************************************** ***************

The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the facts
and the law applicable to your situation.
************************************************** ***************

Be careful.
In the "real" world they will repo the vehicle (depending on it's value),
and will then just appeal whatever "finding, ruling, penalty, or action" the
BK court "may" issue. This finding may take "weeks" to straighten out after
your car has been taken.., either way the car is theirs.., and you are
walking!!
Really, if you are in BK, or even before you start BK.., just stop making
payments.., and always have cab fair home on you at all times. Just buy
some junker that looks bad, but runs good (little oil burns OK). Pay cash
for the junker, don't give your real name, an address, or receipt of any
kind.., and tell the guy you'll handle the registration changeover..!
By this time you should have a P.O. Box somewhere with a "street
address", or a friend that will receive your mail.., but just keep the
junker in the seller name, but the next day put in a change of address to
your mailing spot.
That way in most States the notice for reg. renewal will come to you..,
oh, if you can, always buy a car that is "taged" for the current year..,
Mexicans do it this way all the time.., if you need insurance (mandatory),
then drive it, sell it again.., or dump it for parts and get another..!!

AbbyG wrote:
Actually, you are kind of correct. This is what happens in Chapter 13. This is what I did and kept both my cars.

I think you hit the nail on the head, Abby. Chapter 13 permits a "cram down"
of the automobile loan (paying the fair market value through the chapter 13
plan). A cram down is not available to chapter 7 debtors. In chapter 7 a
debtor can surrender, reaffirm (enter a new contract to pay, probably without
any savings on principal or interest), or redeem (pay the FMV in a lump sum
through motion with the court).

You have no idea how old I am, what my background is, or how long
I've been practicing bankruptcy law. I assure you, I have seen a
whole lot of the "real" world, and in the bankruptcy area, I've
seen a whole lot more than you have.

--
Brett

************************************************** ***************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* lawyer@erols.com *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
************************************************** ***************

The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
such. If you want legal advice, speak with a local lawyer
familiar with your state's laws who can review *all* of the facts
and the law applicable to your situation.
************************************************** ***************


"MWH" <res0n8e5@verizon.net> wrote in message
news:ex5Za.1599$dm.1007@nwrddc02.gnilink.net... I'm 63 Brett.., if you hang around long enough.., in the
"real" world.., there will be a lot of things you haven't seen!! :o) Try California Workers' Comp for a few first'ers!! Forget
this rat-bite BK stuff!! Hell.., go out and practice real law.., you know..?
HAZMAT.., Mosquito Abatement Control Board, immigration law..!!
Good'day!!

MWH

I think it is the time for an old fart like you to retire in this
forum. We do not appreciate personal attacks here. Why not join AARP
and rest in peace?




"MWH" <res0n8e5@verizon.net> wrote in message news:<ex5Za.1599$dm.1007@nwrddc02.gnilink.net>... I'm 63 Brett.., if you hang around long enough.., in the "real" world.., there will be a lot of things you haven't seen!! :o) Try California Workers' Comp for a few first'ers!! Forget this rat-bite BK stuff!! Hell.., go out and practice real law.., you know..? HAZMAT.., Mosquito Abatement Control Board, immigration law..!! Good'day!!