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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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In a Chapter 7 bankruptcy, after reaffirming our car loan and

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In a Chapter 7 bankruptcy, after reaffirming our car loan and then rescinding said reaffirmation, Ford Motor Credit says they can take the car immediately since it has been 45+days since out 341 hearing. Can't I hold on to car until discharge is granted because of the automatic stay? This is a pro se case.
Hi JACustomer,
Is there any equity in the car (is the market value more than the balance of the car loan)? Is so, how much equity does the car have?
Have you had any other Bankruptcies within the past 2 years that were dismissed (by you or by the Bankruptcy court)?

Edited by Christina Fortunato, Esq. on 8/3/2010 at 7:30 PM EST
Customer: replied 7 years ago.
No - we are upside down in the car. Payoff is $15k; book value is $11k. No other B/R's.
The automatic stay only applies to property of the Bankruptcy estate. Since there is no equity in the car, and the trustee did not object to this determination, it did not become property of the Bankruptcy estate, and the automatic stay does not apply.
Customer: replied 7 years ago.
What do you mean by "the trustee did not object to this determination"? When you say it did NOT become property of the B/R estate, are you saying that it is not treated like the other debts - say a credit card debt?
Yes - a car loan is not treated the same as credit card debt, because the car loan is a "secured" debt, and credit card debt is "unsecured" debt.
However, if the car was worth at least $1,000 more than the car loan, the automatic stay would have protected it from re-possession, at least until the discharge, because that $1,000 equity would have been part of the Bankruptcy estate, for the court to take.

Customer: replied 7 years ago.
OK, I see. You seem to have answered my questions satisfactorily (althouugh it wasn't what I wanted to hear!!!!), and I'll OK the payment. Thanks.
One last related question - is Ford required to give me some sort of notice (preferably written) before picking up the car? Are they going to give me a chance to make arrangements to drop it off?
Unfortunately, Ford does not have to give you notice before picking up the car.
However, since there the loan is so upside down, and since it really does not make sense for them to repossess if you are satisfactorily making the payments, it is possible that they will not repossess if you do continue to make the payments on time. Part of the reason for their threat to repossess if you do not re-affirm is they really want you to re-affirm.
Customer: replied 7 years ago.
I gathered that they wanted a reaffirm from us. Car loan is current, but the next payment is due 8/7. Our discharge date is 8/16 but it will take a week or so for the actual papers to arrive here. We already have an approved loan for a new car, but not until we present the discharge notice. So I guess we're stuck renting once the Ford is gone. You don't recommend making another payment to forestall the pick-up by Ford?
No payment - because if they are going to pick up the car, it will not make a difference if you continue to make the payments - they will pick up the car regardless. And if they were only bluffing, and were not going to pick up the car, it will take at least a week or so after your default before they can arrange for it to be picked up.
cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 7 years ago.
OK. You've more than fulfilled your job here. I thank you and am very satisfied with the service.
You're welcome! And thank you for accepting my answer!