May 3, 2010
Do I have to pay off the rest of my Chrysler auto loan after their bankruptcy?
ericacastanon81 asked:
I started financing a hyndai accent through chrysler financial in October 2008. I have paid on this loan every month since we started financing this vehicle. After Chrysler announced that they were filing bankruptcy we are still receiving our statements through Chrysler. Do I still have to pay this bill? If I do, what makes me entitled to pay this because in a small business bankruptcy, a client that received services doesn't necessarily have to pay the small business filing the bankruptcy (example used, a family member's business filed bankruptcy and was forced to close the doors). Why would another creditor or business want to take debt for the probable risk of losing more money, especially in this economy. Is there a way to get out of paying this possible debt or have the loan amount and payments lowered? Are there any perks in this situation?
I started financing a hyndai accent through chrysler financial in October 2008. I have paid on this loan every month since we started financing this vehicle. After Chrysler announced that they were filing bankruptcy we are still receiving our statements through Chrysler. Do I still have to pay this bill? If I do, what makes me entitled to pay this because in a small business bankruptcy, a client that received services doesn't necessarily have to pay the small business filing the bankruptcy (example used, a family member's business filed bankruptcy and was forced to close the doors). Why would another creditor or business want to take debt for the probable risk of losing more money, especially in this economy. Is there a way to get out of paying this possible debt or have the loan amount and payments lowered? Are there any perks in this situation?
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Comments on Do I have to pay off the rest of my Chrysler auto loan after their bankruptcy?
Yes. Somebody somewhere will own the debt, no matter what happens. You will owe them. There is no free lunch.
For example, I have a Washington Mutual MasterCard. WaMu went bankrupt and was taken over by Chase. I still had to make my payments, except now I make them to Chase. Nothing changed.
Yes, you will still owe the money, though it may eventually be to someone other than Chrysler. When a company goes bankrupt, any money owed to them is considered an "asset", which can be used to pay off their creditors. Let's say Chrysler owes Bank ABC a bunch of money, then goes bankrupt. Either Bank ABC will then become the "owner" of your loan, and you will finish paying the loan to Bank ABC, or Bank XYZ will buy the loan from Chrysler, and the money will go to Bank ABC or another creditor as part of the bankruptcy. In the latter case, you would make your payments to Bank XYZ.
No perks for you.
You are missing two things:
(1) You are not receiving a continuing service from chrysler; you received a product from chrysler — a loan. They gave you cash in exchange for a promise from you to make regular payments. YOU have the service relationship — to THEM.
(2) You debt is their asset. It is the judges responsibility to see that all assets are properly divided among the creditors of Chrysler. Your debt will be sold at a discount to a third party (in point of fact, it probably already has been and your loan is not actually a part of the bankruptcy proceeding). The discount added across thousands of similar loans should ensure a profit to the buyer (or they are an idiot).
Your logic is flawed.
Chrysler is restructuring, and even if they weren't what makes you think you are entitled to stop making payments on your car?
Go ahead, stop making payments with your logic, and end up with a repo on your record.