chapter 7- reaffirm car debt

[motts7]

What is the name of your state?IL
I talked to a lawyer about filing for chapter 7, he said that my case is pretty straight forward. With the exception of the car that it could possibly be an obstacle. My car is 1997 528 BMW and I'm the primary owner and my brother is the second ( he also filed for chapter7). I have only 3 payments on the car.
But, he said if I reaffirm the debt or my brother that it would be fine or if we list the value as 50/50 he said IL has a $1200 exemption.

what do you guys think?
Can you explain REAFFIRM CAR DEBT?
Will the trustee sell the car?

 

[bigun]

What is the car worth?

 

[motts7]

The blue book value is $14,000 but when my brother went to the dealership they offered $7000. I have about $1700 left on the car.

Will the trustee sell it? What if we reaffirm the debt?

 

[bigun]

If the exemption for your state is $1200 and it's worth $7K or better, darn right the trustee will snaggle it.
Instead of reaffirming, you'll likely need to redeem the car. That means you come to an agreement on the price {less the state exemption} and pat the trustee that amount.
www.722redemption.com makes these loans.

 

[motts7]

What do you mean by pat the trustee? bribe him?
And what do you mean come to an agreement?
My brother's attorney did'nt seem to think this would be a problem in his chapter7 case.

 

[bigun]

No, I'm not talking about a bribe. It's pretty routine to pay the trustee the amount above the exemption if you wish to keep the property.
I don't see how you'll be able to keep a $7K car if the state exemption is $1200.

 

[motts7]

One more thing why would I take a loan out on the car again?
The website you pointed to me seems like a scam dude. I talked to my brother if they take the car and we knock off our debt. than let them.
We should'nt let the car stop us elimanting our debt over $55,000.

 

[motts7]

But, I don't own the car yet. I stll owe payments on it.
What about other people that kept there car. I'm sure the cars were worth more. I'm not disagreeing with you and I appreciate your advice.
Are you a lawyer.collection agent, or a trustee?
If worse come to worse let them take the car to wipe our debts I think it is worth it.

 

[bigun]

Nope, none of the above. Just someone with an unhealthy interest in the process.
You need to understand that the equity is the driving force. Not now much you owe on the balance. Using the figures you provided, the car is worth $7K and you owe $1700. You've $5300 in equity. Well above the $1200 exemption.
People keep cars if the equity is at or below the exemption level or, if they owe more that the car is worth then they'll reaffirm idf they still wish to keep the car and pay on the orginal terms.

 

[motts7]

Thanks for clearing it up.
Will the trustee sell the car is that like a 50/50 call by the trustee.
Using your figures than if I came up with $5300 than I can keep the car?
What up the exemption of $1200 would that be subtracted from the $5300 or the $7000.

 

[bigun]

The exemption of $1200 would be subtracted from the equity .
The trustee will make the call based on what the car will reasonably bring at an auction.

 

[motts7]

if the car is valued at a certain price. Can I pay that value to settle the equity of the car. Say $4000.
Kelly Blue book value is $13,000. But, I know that is always high compared to what a dealership will bring.

Sorry to bother you. One more thing my brother has a stake in that car.( He is the secondary owner on that car) He filed for chapter 7 and his lawyer did something about the car on his final paperwork. Would that make a difference?

 

[bigun]

Can I pay that value to settle the equity of the car. Say $4000

Yes, that's what I meant by redeeming the property from the trustee.
Exactly what did your brothers lawyer and your lawyer say about the joint ownership?

 

[motts7]

I called my brother the lawyer will call him back on monday. I asked my brother to ask his lawyer how exactly did he file the car.
The lawyer I talked to about my case said that he wants to know how my brother filed the car.And that if we reaffirmed the debt than my case would be pretty routine. But, I dont understand the reaffirm part for both of us? If my brother reaffirmed the debt than do I have to? And so I have to come up with the money right away? Hopefully, if the trustee values the car at real low price then this would be simple. The car has over 110,000 miles and needs some work done.

 

[Ladynred]

The cost of any major repairs would lower the equity, you'd subtract the amount of the repairs.

If your brother reaffirmed in his bankruptcy, then he's still on the hook for the loan should you ever default, as are you. I believe in IL you must either reaffirm or redeem to keep secured property, so my guess would be your brother reaffirmed..meaning he's still liable for the debt. If YOU don't redeem it to keep it and the Trustee takes it and sells it, them YOU would be off the hook, but your brother would STILL be liable for the remainder of the debt.

Sounds to me like you're going to be on the hook to redeem or lose the car and have your brother making the remaining payments.