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Fritz
Fritz, Attorney
Category: Bankruptcy Law
Satisfied Customers: 302
Experience:  Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases
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I have filed Ch 13 2 years and 7 month ago! my car beca 5 montme

Customer Question

I have filed Ch 13 2 years and 7 month ago! my car beca 5 montme a secured asset and in the pasths has also became a very expencive vehicle with 163000 miles.My attorney haings not been very helpful by filing late motion to incur debt stating to purchase a vehicle with only 10% interest and no more than 60 payments for $325.00 which is what is being paid now for my car. I found a good deal for $396.00 x 72 mo for a new very economical car and they will payoff my car with a $1200 rollover and no money down applying rebates I am facing an additional $2800 in repairs and by his delays i will lose this deal!
Can I just surrender my car and be relieved of the payments?
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Fritz replied 2 years ago.

Fritz :

Hi, I'd like to assist you with your Bankruptcy questions this afternoon.

Fritz :

Some bankruptcy courts may allow you to file a Motion to Modify Plan to surrender your car.

Fritz :

However, keep in mind that your monthly Plan payment will not necessarily be reduced, as you are still required to pay all disposable income into the Plan.

Fritz :

If you surrender the car, you would presumably have additional disposable income. I know that's not actually what would be happening here (since you intend to buy a new car), but this is something to discuss with your attorney so you don't end up essentially making two car payments because this wasn't done correctly.

Fritz :

You cannot simply surrender the car without filing a Motion to Modify Plan.

Fritz :

In fact, some courts will not allow you to surrender the car at this point in your case. Let me see if I can find Alabama cases on this issue.

Customer :

Thank you,

Customer :

hank you

Customer :

I suspect that att this stage in my ch 13 i cannot return my vehicle,

Fritz :

Here's a very succinct discussion of the narrow legal issue you're facing: http://www.orb.uscourts.gov/Judges/file_attachment/400402191010102121.pdf

Fritz :

There are two lines of cases; you may be able to surrender the vehicle under one line of cases (it's not clear which line Alabama bankruptcy courts would follow).

Fritz :

Should you be allowed to surrender the vehicle, Alabama law would permit the creditor to amend its claim after selling the vehicle to add any deficiency as unsecured debt.

Fritz :

I found an Alabama case directly on point. See IN RE WHITE, Bankr. Court, MD Alabama 2008, here: http://scholar.google.com/scholar_case?case=6404370446409942571&hl=en&as_sdt=40005&sciodt=2,10

Fritz :

Unfortunately, this case would suggest that you would NOT be allowed to modify your Plan to provide for the surrender of the car and reclassifying any remaining balance on the secured claim to unsecured status.

Fritz :

I apologize for not being able to provide a more helpful answer, but it appears that you would be unlikely to prevail on a Motion to Modify Plan/Motion to Incur Debt given relevant case law.

Fritz :

Please let me know if you have any additional questions. Thank you.

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Fritz
Fritz
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Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases