Filing Ch. 7 in April and have question about making payments

[Tchr2012]

I am well under the income limit for filing a Chapter 7. I intend to file in April, 2022, and I am going to recommit to my home and car loans. I know I need to keep those accounts current if I want to reaffirm the loans. Should I stop making payments now on the debt I do want to include in the bankruptcy (credit cards and medical)?

Thank you for your help.

[Clambert1273]

My attorney told me to stop paying in October and we dont file until tomorrow, I would stop all your unsecured payments & focus on the secured and paying attorney

[justbroke]

I would reconsider reaffirming any debt. There is usually not one single reason to do so. To maintain your "credit" is not one of those reasons. However, being forced to due to local rules is the one of, if not, the only reasons.

[bcohen]

Once the decision has been made that you will be declaring Chapter 7 bankruptcy, it is wise to stop paying on any and all unsecured debts, as well as any debts secured by something which you want to surrender (for example a car which no longer runs). Any debts secured by something which you want to keep must be kept current. It is not considered a "preferential payment" if you stop paying on your credit card debt, medical debt, and other unsecured debt(s) while continuing to pay your mortgage and car loan(s).

[flashoflight]

Do NOT reaffirm the house loan. The lender won't kick you out as long as you make full monthly payments just like before. If you want to reaffirm the house, then refinance it after the bankruptcy to get a new mortgage that is not tainted by bankruptcy. There is 2 years seasoning for FHA and 4 years for conventional. You can work on your credit while you wait. The reaffirmed mortgage will always be tainted with bankruptcy. There is no legal obligation that a reaffirmed mortgage will get statements, autopay, online access, or reporting to credit bureaus. The only thing that's guaranteed with a reaffirmed bankruptcy is that you will still be on the hook for a deficiency after a foreclosure.

Do NOT reaffirm the auto loan unless there is one of the super rare exceptions like a local rule or if Ford Motor Credit is the lender. The vast majority of lenders want your payments and not your car so they won't spend the money to repo if you are current. Your lawyer knows which of the very few auto lenders potentially need reaffirmation. Even then, if the car is iffy you may want to choose surrender over reaffirmation. Best to ride through the car without reaffirmation so you can keep the car without the obligation of owing on it. A car that seems to have signs of dying or too expensive/may trips to the mechanic will probably die sooner rather than later.

Chapter 7 is a fresh start. You're mostly wasting it if you reaffirm the house and the car.