Old law, what do you think?

[apie1]

What is the name of your state? IL

Please advise me if this thread does not make any sense...

In a previous thread, I had mentioned that my cousin had filed for a chapter 7 no asset case under the old. She has a co-signer as a secured loan for her vehicle (1996 Toyota) since 2001 and has never missed a payment. She has agreed to still keep paying the payments on the vehicle with the help of her co-signer through what I guess is a declaration that she signed through the lawyer that filed her case that she would keep paying the payments on the secured loan and/or other secured loans. There is $4500.00 left on the vehicle to be paid and a trade in value of $2700.00 and a suggested retail value of $7070.00. Unfortunately the lawyer is swamped with other different cases, so my questions are:

Will the trustee consider this as equity in the vehicle, and if so, what would happen?

How would this effect the co-signer? (If it does)

Any answers would be appreciated.

 

[bigun]

http://www.thebankruptcysite.com/bankruptcy-exemptions/illinois.php

Il. allows $1200 equity in a car as an exemption.
How are you arriving at the $7070 figure? What did she list as the valie on her schedules?

 

[apie1]

This is probably a stupid place to look, but for me I had no other alternative to look...kellys blue book.

So how would that necessarily work when equity and a co-signer is invloved?

 

[bigun]

OK, neither your cousin nor the trustee would be able to sell it for a retail value.
Most lawyers say use KKB or, private party sales {look in the newspaper ads and see what individuals are asking for that model}
If she put down $7K, she needs to see her lawyer about amending the filing.
If the trustee took the car, he'd first have to make pay her the $1200 exemption and then, make the finance company whole. Tack on the time and expense of selling and it likely is not worth the trustees time.
As long as payments are made or, the auto loan is paid in full, there should be no repercussions to a cosigner.

 

[apie1]

As for the value of the vehicle on her schedule, I believe what is owed or even less...Unfortunately i am not quite sure.

 

[apie1]

So in a sense, as long as they keep paying for it as they have, pretty much she should be all right? I did pull it up and looked at it as a private party value and it is roughly around $4500-$5000.

 

[bigun]

I believe {from other posters} that Il. requires a reaffirmation agreement. She sighns that and they'll let her continue business as usual.
Her lawyer will walk her through it when the time comes.

 

[apie1]

Thank you for your prompt answer...I will pass the message on to her so that she does not stress as much as she has.