Questions about cross collateralization and possible refinance before filing

[justbroke]

If you intend to keep the boat, you probably should continue making on-time minimum payments to the credit union. If you went past due on the credit card, the CU may seek to repossess the boat under the terms of the collateralization agreement.

[PurplePanda]

If you intend to keep the boat, you probably should continue making on-time minimum payments to the credit union. If you went past due on the credit card, the CU may seek to repossess the boat under the terms of the collateralization agreement.

Thanks for the confirmation. I appreciate it.

[flashoflight]

I don't understand how the backstory justifies keeping the boat if you're able to wait until November to file anyway and get past the lookback period. You really should get rid of it and pocket the money you're paying to the boat and the cross collateralized credit card. There is no equity to keep since you are way negative thanks to the cross collateralization. Talk to your lawyer of course and maybe try to make a deal to segregate the boat debt. But if they won't do it, you're wasting a lot of money every month.

If you know you're filing BK, it has to be a very, very special reason to pay unsecured debt (or secured debt that has insufficient collateral like in your case) from that point forward.

[PurplePanda]

I don't understand how the backstory justifies keeping the boat if you're able to wait until November to file anyway and get past the lookback period. You really should get rid of it and pocket the money you're paying to the boat and the cross collateralized credit card. There is no equity to keep since you are way negative thanks to the cross collateralization. Talk to your lawyer of course and maybe try to make a deal to segregate the boat debt. But if they won't do it, you're wasting a lot of money every month.

If you know you're filing BK, it has to be a very, very special reason to pay unsecured debt (or secured debt that has insufficient collateral like in your case) from that point forward.

Well, I don't pay anything for the boat. My boyfriend makes the payment, pays for all of the insurance, maintenance, upkeep, etc. It costs me nothing. For that reason alone, it makes sense to keep it. But, also, the lookback period in Michigan is up to six years. When I file, I only have to disclose the insider payment (or whatever you want to call it) for the last two years on paper. However, if the trustee asks questions about any payments within the last six years, I will have to tell him and he can go after the money. Then, I can explain that my boyfriend has been paying me back for the money I paid on his behalf by paying for the boat. It would be great if my attorney could make a deal with the credit union but I understand that may not happen.

[flashoflight]

PurplePanda Are you paying the credit union credit card? Unless he is paying that too, it's costing you money to keep the boat. If the credit union gets wind that you will file BK or behind on the credit card, they may not release the lien unless you payoff both the boat loan and the credit card. Your boyfriend can buy your boat for fair market value or buy another boat.