Q about Negative Equity Vehicle in CH 7

[BkinTX]

We have recently signed the paperwork for our bankruptcy and the filing is to take place on Monday.

We made the decision to let go of our vehicle. It's an '06 and we have traded in vehicles to the point that we are very upside down on this one. We still owe about 20k with payments until about 2013.

When we signed the paperwork the legal assistant informed us that she needed to have us keep the vehicle so our budget would work for the bankruptcy (our auto payment is 500/mo).

She advised us to just stop making payments. She said they would not be able to repo the vehicle until they went through the court and it would be several months.

We are current on our payments.

My concern is that since this debt will not be discharged, the bank can come after us for what is owed after repo and sale of the vehicle. Is this a possibility?

We DO NOT want to keep the vehicle. It's an albatross. But we also don't want to be sued or have wages garnished.

TIA for any input!

[StartingOver08]

What your paralegal is trying to do is have you start off with the vehicle payment in the petition, but not actually reaffirm the vehicle.

It is an excellent strategy for you.
To actually reaffirm: you, your attorney and the lender would have to sign a multipage reaffirmation agreement. If you do not sign the reaffirmation agreement, you did not reaffirm and the lender can NOT come after you when you surrender the vehicle.

[BkinTX]

Thanks so much! That makes total sense.