Car loan before filing?

[listo]

Okay, I hope someone can help me. My husband and I have the appointment to file Chapter 7 this coming week. Our car is old and paid for but we just started experiencing some issues with the trans and the gears are getting stuck. We only have this one car!

We want to trade it in for another one but the only way we can do this is if we take out a loan. The loan will only be 5K. We've been approved but what is going to happen with the filing? Can I file and not worry about that we just took out a loan? How does that work exactly? Will we end up losing the car? I can't get in touch with lawyer and we need to know if we should move on getting this car. Any help would be great.

Thanks!

[DontBother]

As long as you can afford the car payment, you should be fine to reaffirm the loan. Which means that you're agreeing to again be bound by the terms of the purchase/finance contract. You keep making payments, and you keep the car. If you later default on the loan, then they can take normal collection actions against you.

[listo]

That makes sense. I was thinking that we were not allow to open any lines of credit (which normally its not like you can get credit - but the car loan is esp for bad credit/bankruptcy). Didn't want to get in trouble or delay filing. I just want to get this all behind us and move on!

Thank you!

[CATCHMEIFYOUCAN]

Just make sure you are up or ahead on your payments when you file and show proof. My honda got flooded, the insurance company would not total the car they gave me $1700 bucks to put a used motor in it. Well at 140,000 miles I don't think I wanted to attempt to have a flooded engine repaired. So I sold the car to my neighbor as is for $500 than I used the insurance money and put the total down on a new Hyundai a month before I actually filed. I had to bring proof I was up one or two payments on the new car when I went to my 341 meeting. I didn't have a car payment for like several years, in a way I'm glad I did because that was one expense I could deduct from my plan when I had filed for Ch13 last year.

Best of Luck to you, Catchmeifyoucan

[t&msmom]

The way my lawyer explained it, is that normally we don't start out planning on filing for BK. She said, that really, all these credit card/loan companies enable people who really should have the credit they have, to use it, and get "stuck". We financed a car the day before getting sued...now we have to file BK. I've made one payment to my car company, but the lawyer says its fine. They chose to extend credit to us, knowing there is that risk.

[CATCHMEIFYOUCAN]

Thats a good defense line !

I've made one payment to my car company, but the lawyer says its fine. They chose to extend credit to us, knowing there is that risk.

That is really a good defense line, hmmm. So if a creditor were to object and cry fraud. I think that would make a useful defense line in court (im far from being a lawyer) but heck, why give someone or extend someone credit at the time and than try and cry fraud on them later!? They should of checked that persons creditials from the begining, so yes YOU MR CREDITOR are just as much fault for taking a risk and lending us debtors the mula to begin with!

Best to you, Catchmeifyoucan

[t&msmom]

I've made one payment to my car company, but the lawyer says its fine. They chose to extend credit to us, knowing there is that risk.

That is really a good defense line, hmmm. So if a creditor were to object and cry fraud. I think that would make a useful defense line in court (im far from being a lawyer) but heck, why give someone or extend someone credit at the time and than try and cry fraud on them later!? They should of checked that persons creditials from the begining, so yes YOU MR CREDITOR are just as much fault for taking a risk and lending us debtors the mula to begin with!

Best to you, Catchmeifyoucan

I'm not sure if you are being facetious, or are agreeing with what my lawyer said. We didn't get a car loan intending to file. If we knew we were going to be filing in December, and went out in November and got a car, that I feel would be fraud. But just like the people who are going to try to rent before they file, to make sure they can secure a house, how is this different?