Need some advice

[johnnyp26]

I've been reading up for a bit on here and have learned a lot from you guys. So thank you in advance for taking the time to answer my questions.

I hired an attorney about 2 weeks ago to file chapter 7 bk. He was a bit pricey, but came highly recommended so I went with him. Plus he used to be a trustee in my state, so he knows his way around. However, he hasn't given me clear answers on a few things...

My wife and I own 2 vehicles, and plan to reaffirm one and let one go. The one we are letting go I am $5k upside down in, so my plan was to just go by the same car again after the discharge (08 Wrangler). I've heard from some people they have purchased before the discharge, is that true? That would seem to me not to be the right thing to do and could anger the trustee. I just went 30 days late on it, and since it looks like this thing is going to take about 5 months start to finish, I am concerned about not having a car as I would expect the bank will come repo the car before the discharge. If I am way off base here please let me know. I would rather not go buy a beater, by time I pay to register it and such, it would be more money then I care to spend. On average how long would it take for the lender to come repo my car?

The second issue is our house. We are currently about $70k upside down in it, and our attorney advised us to let it go. I initially hadn't considered this because I didn't want to go back to an apartment, however I've been looking into just renting a house. So assuming I include it in the bk, how would that work with the lender taking it back? Do you just vacate it after the discharge, or do you wait for the lender to contact you to get out after the discharge? I've heard of someone staying in their home almost 9 months after discharge, which seems a bit odd to me.

Again, thanks in advance for taking the time to help.

[StartingOver08]

Johnny, welcome to the forum!

1) Your vehicle: You can buy yourself some time if you offer to reaffirm your jeep in the schedules but do NOT sign a reaffirmation agreement so you can 'ride thru' with your vehicle. This means if you stop making payments, when they come to get the vehicle it will not go against you in your credit because the vehicle is being reported as IIB. Search here on this forum for ride thru info. Or you can try to renegotiate the payment with the lender, if they will not negotiate to a figure you find acceptable, you can then surrender your vehicle on your Statement of Intentions. You can change the Statement of Intentions anytime prior to your discharge.

2) The house. I surrendered my house in my Ch 7 and I am still here waiting for the final judgment. My attorney said not to move until the bank gets the final judgment and it has been since May 2008 (last pmt) and since Jan 2009 since Ch 7 discharge. Use the time to get on your feet after you have filed Ch 7. I happen to be in Fl, one of the places where a foreclosure takes a long time due to the sheer number of people in foreclosure in our area. You could have a different time line. Best to ask your attorney.

[johnnyp26]

Johnny, welcome to the forum!

1) Your vehicle: You can buy yourself some time if you offer to reaffirm your jeep in the schedules but do NOT sign a reaffirmation agreement so you can 'ride thru' with your vehicle. This means if you stop making payments, when they come to get the vehicle it will not go against you in your credit because the vehicle is being reported as IIB. Search here on this forum for ride thru info. Or you can try to renegotiate the payment with the lender, if they will not negotiate to a figure you find acceptable, you can then surrender your vehicle on your Statement of Intentions. You can change the Statement of Intentions anytime prior to your discharge.

2) The house. I surrendered my house in my Ch 7 and I am still here waiting for the final judgment. My attorney said not to move until the bank gets the final judgment and it has been since May 2008 (last pmt) and since Jan 2009 since Ch 7 discharge. Use the time to get on your feet after you have filed Ch 7. I happen to be in Fl, one of the places where a foreclosure takes a long time due to the sheer number of people in foreclosure in our area. You could have a different time line. Best to ask your attorney.

I am in FL as well, so I would guess I'll be in the same boat as you where it will take quite some time for them to get around to getting us out of here. So do they treat it like a foreclosure as far as the process is concerned? Will they give us like a 30 day notice or something to get out? I am just concerned with a wife and 2 kids, and a crazy work schedule of making this all go as smoothly as possible.

I'll read up on the ride thru, I've seen a few things about it but didn't quite understand how it works. I am still learning as I go I guess.

[StartingOver08]

The "official" ride thru is you check on your Statement of Intentions that you want to reaffirm but then you do NOT sign an agreement BUT you continue to pay as agreed. If times get tough and you have to stop payment, they can repossess the car but not report it on your credit report because it is showing IIB already.

You will have at least 30 days notice from the time of the final judgement. Just keep track of the foreclosure process. Your house will also read IIB when you file and are discharged in your BK, but the lender has to complete the foreclosure process in order to get the collateral into their name and clear any jr liens that might be on the property.

[johnnyp26]

The "official" ride thru is you check on your Statement of Intentions that you want to reaffirm but then you do NOT sign an agreement BUT you continue to pay as agreed. If times get tough and you have to stop payment, they can repossess the car but not report it on your credit report because it is showing IIB already.

You will have at least 30 days notice from the time of the final judgement. Just keep track of the foreclosure process. Your house will also read IIB when you file and are discharged in your BK, but the lender has to complete the foreclosure process in order to get the collateral into their name and clear any jr liens that might be on the property.

So I should be still paying on my car? My attorney told me to stop paying it if I plan to include it in the BK, because I was just throwing money away.

[StartingOver08]

There are some terms that get confusing pretty quick, one of the terms is "included in bankruptcy". ALL debt must be listed in the bankrupcy so in that sense it is included. The disposition of that debt is what you indicate on your petition: discharge, or reaffirm. Some debt is non-dischargeable (thinking of student loans and taxes).

Naturally you want to discharge all of your unsecured debt. Sometimes people want to discharge secured debt too by surrendering the house or the car or both. Sounds like your attorney was suggesting that you surrender your house and car and if you decide to do so, then yes, you would not make any more payments on either the house or the car. Any payments you make on a secured debt that you are surrendering is throwing money away.