Filing in 4 mos. OK to buy used car & reaffirm?

[trueblues]

I apologize if this is covered elsewhere, I couldn't find an answer.

I've consulted with three attorneys. They all said we have an straight, no asset Chap. 7 case. My husband and I have totally separate credit cards and checking accounts. He pays his debts with his salary, I with mine, but I lost my job recently. The amount of cc debt in my name only is $58,000 and his is $22,000. I'm starting to fall behind but his credit is excellent and he's been able to stay current with his payments.

We have two old junk cars that constantly need repair. I know we'll have to get something reliable soon.

One of the lawyers suggested that my husband buy a decent used car before we file while his credit is still good, and then reaffirm it. I'm not familar with how reaffirmation works. Does it basically mean we list the car payments as debt but say we'll continue making payments? Is this ever questioned, like, where will you get the money to keep current? If its OK to do this, is there any downside or surprises, for example, can the car dealer jack up the interest rate because we file BK?

Thanks for all the great info here.

[ShouldWeFile]

No downside other than having to pay for the car...

I would personally not recommend it, being in the car business for 15 years and having just turned in 3 late model cars to the respective lenders. But many can find a way to justify it (I did - three times in the last couple of years). The car we are keeping in a 2001 Honda Odyssey with 115,000 miles...

[trueblues]

No downside other than having to pay for the car...

I would personally not recommend it, being in the car business for 15 years and having just turned in 3 late model cars to the respective lenders. But many can find a way to justify it (I did - three times in the last couple of years). The car we are keeping in a 2001 Honda Odyssey with 115,000 miles...

Do you mean you had to turn the cars in because the owners couldn't afford the payments? Hubs could squeeze enough to make payments for a couple months, then when our credit card debt is discharged it wouldn't be a problem at all.

Or are you saying the trustee might take the car even though we've only made a couple payments on it and we reaffirm?

I'm just afraid that one or both will totally break down after we file and then we'll be SOL. One is 15 yrs old, the other 12 yrs, both with high mileage. The repairs we're having to make are costing us more than they're worth.

[ShouldWeFile]

Yes, I turned the cars in because I was sick and tired of trying to pay for them. In total we owed about $20,000 more than they were worth. All very nice cars. Mercedes 2 seater leased new (judge would have laughed if we tried to keep that), new hybrid Civic. I have finally come to the realization that ALL debt is negative. It is an obligation that one must pay from FUTURE earnings! A home mortgage can be an exception if there is a large enough down payment.

But anyways, to answer your question, you can buy a vehicle and they will allow you to reaffirm and keep it with no hassles; I just don't recommend it. If you are buying a 2-4 yr old civic, and borrowing 10-12k over 3-4 yrs, OK, that I can see perhaps... but I wouldn't recommend it just cause I don't recommend debt to anyone! Paying for repairs is still likely less costly than car payments...

[trueblues]

I'm sorry you had to give up your cars.

Yeah, your example is pretty much what we'd like -- a 2-4 year old Sienna or similar. (need room for the kids). Right now, our cc minimums are about 9x more than a car payment would be. We're going to need something sooner or later, that's a given.

Thanks for your advice.

[ShouldWeFile]

I'm sorry you had to give up your cars.

Oh no, quite the opposite, I am glad to have the opportunity to eliminate the monthly obligation(s) of the vehicles with the BK.

The blessing in disguse for us in our financial hardship(s) is that we will no longer live at (or above) our means, but rather well below our means.