2 Cars With Same Bank - Can I Redeem ONE During Ch7?
I have two vehicle loans through the same bank. They are "cross-collateral" secured loans or something like that the bank says. They say I cannot redeem one vehicle, I must redeem BOTH or lose BOTH. My lawyer says this is wrong, that I can redeem just one if I choose. He's filing a motion to redeem to get this taken care of. (Redeeming is paying them the VALUE of the vehicle to free it from the loan during a chapter 7). Is he correct? I am starting to have doubts about his knowledge (or his level of effort perhaps). I'm praying he knows what he's talking about, but he has flip-flopped on me on three significant issues so far so it's pretty scary.
Answer:
My understanding of the redemption process is that its up to them to decide to let something go for whatever the established value is. It sounds to me like they are trying to make it sound like there is some statute whent the reality is they probably just want to try and get you to redeem both. I think however that the Trustee might actualy have some say in the matter. I think your atty. is correct, the issue is whether they will go along with the plan. It would seem to me that if he only reaffirmed one of the cars, the balance of the car he let go would automatically get tied to the car he keeps because of the "cross-collateralization" in his loan agreement.
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