Considering chapter 7. Have questions.

[Mike859]

I'm in the process of contacting an attorney for bankruptcy but i have a few questions that maybe i can get some info on so i know what to expect.

My income is borderline for chapter 7 according to the charts.

I have approx 55k in unsecured debt mainly credit cards and debt consolidation loans.

I am not currently behind on anything and havent ever had a late or missed payment on anything.

What changed is that back in February my ex left (never married) leading to a loss of approx 1000 per month in household income (all bills and debt in my name) since then I've maintained the bills using my tax return and stimulus check and bonus from work. But i am now running thin and only have about a month or 2 until i am forced to miss payments on things.

i have several questions about my situation.

First i have a 2018 camry in my name that is my exs. She paid the down payment when it was purchased and gives me the money every week to pay for it and the insurance. She has made every payment on it so far. In our temporary custodial agreement it is stated its hers so long as she makes the payments and when it is paid off it is to be transferred to her. will this be on in bankruptcy? It has significant equity due to large down payment but it is her equity not mine.

Second my vehicle is a 2005 toyota 4runner with 315k miles its not going to last a whole lot longer without major money put into it. Should i buy a new car with no downpayment before filing? I can get a great interest rate with my employee discount.

Third I own m home with a mortgage. The mortgage is up to date minus 2 months do to covid deferment. I plan on paying the escrow up to date this month and start resuming payments. I want to keep the house and I've only had it 3 years so it has limited equity. It was bought using a rural housing loan with no down payment. Will it be an issue to keep it?

[justbroke]

Welcome to BKForum!

First i have a 2018 camry in my name that is my exs. She paid the down payment when it was purchased and gives me the money every week to pay for it and the insurance. She has made every payment on it so far. In our temporary custodial agreement it is stated its hers so long as she makes the payments and when it is paid off it is to be transferred to her. will this be on in bankruptcy? It has significant equity due to large down payment but it is her equity not mine.

If the vehicle is not titled in your name, then it is not legally yours. You only have possession of the vehicle. Furthermore, you don't even hold an interest in the vehicle since you are not making the payments. Basically, you're just borrowing someone else's car. So this vehicle would not be listed in the bankruptcy as an asset.

Second my vehicle is a 2005 toyota 4runner with 315k miles its not going to last a whole lot longer without major money put into it. Should i buy a new car with no downpayment before filing? I can get a great interest rate with my employee discount.

Some attorneys will tell you to make sure you have a decent vehicle before filing a Chapter 13. As to whether you should do this in a Chapter 7 will depend on a few things; whether the vehicle will last another 6-12 months, the maintenance costs over the next 6-12 months, your credit, and whether you can actually afford a new vehicle.

Third I own m home with a mortgage. The mortgage is up to date minus 2 months do to covid deferment. I plan on paying the escrow up to date this month and start resuming payments. I want to keep the house and I've only had it 3 years so it has limited equity. It was bought using a rural housing loan with no down payment. Will it be an issue to keep it?

You should NOT reaffirm the home under any condition. The issue is that you've already run into issues keeping up with payments, so that is a very good indicator that the home should not be reaffirmed. (If the mortgage is through a Credit Union or other small bank, not reaffirming "could" be an issue.) You should, however, not surrender the home. Your attorney should mark the home, on the Statement of Intentions, as "stay and pay" (also known as the ride-through).

[Mike859]

Welcome to BKForum!

If the vehicle is not titled in your name, then it is not legally yours. You only have possession of the vehicle. Furthermore, you don't even hold an interest in the vehicle since you are not making the payments. Basically, you're just borrowing someone else's car. So this vehicle would not be listed in the bankruptcy as an asset.

The vehicle is titled in my name she is the one is possession and making payments.

[justbroke]

The vehicle is titled in my name she is the one is possession and making payments.

Sorry that I misread that (even though I know you wrote that it was in your name).

So you will have to list the vehicle. You "only" hold what's known as bare legal title. Since the ex has made all payments on the vehicle the vehicle "technically" belongs to the ex. Unfortunately this may result in a hearing/trial within the bankruptcy court. The issue is that you hold title (as expressed on the face of the vehicle's title). You will need to prove that you only have bare legal title and that the vehicle belongs to someone else. This may include -- will likely include -- providing receipts for every payment as possibly an affidavit from the ex that the vehicle has always belonged to them.

For this reason, I may tell you that you should not file on your own (Pro Se). Some Chapter 7 Trustees may be easier to deal with, but others may want to take this to a hearing and have you and the ex testify under oath, with all documentation entered as evidence. There's no easy way to tell whether you are going to get grief or not.

[Mike859]

Ok thats fine then. The down payment was made with a check from her account and my bank statements show the money direct deposited from her check each week for the car and insurance.