Hi, I'd like to assist you with your Bankruptcy questions this afternoon.
Some bankruptcy courts may allow you to file a Motion to Modify Plan to surrender your car.
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.
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.
You cannot simply surrender the car without filing a Motion to Modify Plan.
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.
I suspect that att this stage in my ch 13 i cannot return my vehicle,
Here's a very succinct discussion of the narrow legal issue you're facing: http://www.orb.uscourts.gov/Judges/file_attachment/400402191010102121.pdf
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).
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.
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
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.
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.
Please let me know if you have any additional questions. Thank you.
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