Secured Chapter 13 Auto Bankruptcies
ACC would be interested in purchasing your organization's existing Secured Chapter 13 auto loan accounts. We are able to acquire your new bankruptcy accounts upon court notification, before they are confirmed.
It doesn't cost you anything to get a bid, and could cut out much of the underlying expense and exposure.
ACC concentrates on the purchase of secured Chapter 13 bankruptcy accounts. The benefits to a lender selling accounts to ACC include:
*Recognition of up-front cash
*Elimination of legal risk for bankruptcy accounts
*Reduction in bankruptcy collection expenses being paid outside counsel
*Elimination of bankruptcy management staff and training
*Dramatic reduction in outside legal costs for bankruptcy management
*Application of cash tied up in bankruptcy to the core business
Additionally, the sale of bankruptcy accounts to ACC has a positive impact from day one on a lender's balance sheet, P&L, cash flow, and enterprise valuation.Without question, a sale is an important tool for CFO/Owners to use when evaluating their appetite for retaining low-yield, high-risk bankruptcy accounts. In light of the clear benefits of selling to ACC, many auto lenders and dealers that do their own financing are choosing to eliminate the risk, worry, and expense of managing this very complex area of their business. They are choosing instead to focus their energies on their core business, while depending on ACC to fill this specialized need.
ACC was founded in 1994. Our company is based on the belief that our customers' needs are of the utmost importance. Our entire team is committed to meeting those needs. As a result, a high percentage of our business is from repeat customers and referrals.
An ACC portfolio acquisition of Chapter 13 secured retail installment contracts could have an instant positive impact to your balance sheet. ACC will need just basic data to give your company a quick bid.
The following is a list of common questions from banks, auto lenders, and dealers,
Q. What data will ACC need to give a complete written proposal?
A. ACC requires the following to give you a proposal. The customers name, social security number, collateral description, birth date, payoff balance, date of last payment and the company name of the secured party. It will take ACC 5 to 8 business days to verify balances and payments history with the bankruptcy courts. We would then send you a written proposal. ACC will then send you a contract for you to execute by assigning the contracts to us. ACC will write you a check or wire funds once we have agreed and executed the final documents. ACC will buy any size portfolio.( This information needs to be sent in a secured format and only after your organization and ACC have executed a mutual non-disclosure agreement )
Q. Does ACC file proofs of claim?
A. Automotive Capital Corporation will file the proof of claims and transfer after we buy them. We verify that a perfected Proof of Claim (POC) exists for the claim as part of our due diligence process, and afterwards, ACC will file the POC once we have established a flow arrangement relationship together where we buy the filings at inception.
The way the ACC C13 flow program will work on a go forward FLOW basis is; ACC will set your company up a secured site for your personal to upload your notice of filings. ACC will be alerted that file has been uploaded and as they are received each month, we will then file a proof of claim and your company will be paid the same percent as this purchase, on the outstanding unsecured principle balance (unless the debtors attorney has filed for a Cram Down, then you will be paid on the cram down balance should the court award the lower balance.) ACC will fund your company on all deals received by the 10 TH day of the following month.
The only recourse now and going forward with the ACC flow arrangement would apply when any deal you have sold hasn't been confirmed with the courts, and the title wasn't applied for in a timely fashion. This would render the claim unsecured debt resulting in a put-back.
Q. Does ACC buy secured and unsecured claims?
A. ACC will only buy secured Chapter 13 Performing Auto Loans; ACC only purchases accounts with a secured component. If there is a secured and unsecured account claim for the same debtor/creditor, we acquire both. However, we do not purchase accounts that started as “secured + unsecured” (a.k.a. split) where secured claim has been paid-in-full and only the unsecured claim remains. ACC will buy unsecured claims under our flow arrangement, if ACC is buying the loan at inception of notice of filing.
Q. Consequences of dismissal to my bank, finance company, or dealership ?
A. Dismissals are Automotive Capital's problem after the effective date of the purchase. If the dismissal occurred after due diligence but before funding, it is sold back. If dismissal occurs after funding, ACC keeps the account.
Q. Confirmed and unconfirmed cases?
A. At this stage ACC will buy both the confirmed and unconfirmed accounts at zero recourse.
Q. How is purchase price calculated by ACC?
A. Pricing parameters are calculated from a complicated formula. Some factors we use are loan to value of remaining principle balance, total number of loans, aging of the portfolio, the bankruptcy region, the Judge, cash flow.