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High Car Payment / Reaffirmation & Ch 7

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    #1

    High Car Payment / Reaffirmation & Ch 7

    I have 2 cars that I intend to keep (reaffirm also) when I file Ch 7 (60 days out). Here are the details:

    2006 Jeep Wrangler / 34k miles / $18.5k owed / $420/mo x 56 payments left
    2010 Ford Expedition / 1k miles / $43k owed / $733/mo x 60 payments left

    We had a 2007 Expedition up until a month ago. The payment on it was the same as our new one - $730/mo and we had about 22 months left on it. It had quite a few mechanical issues (some serious) and had 80k miles on it. I had an opportunity to get out of it with no $ out of pocket so I took it. I figured I would not be buying another new car for a while... Also, I was able to cancel a warranty (worthless by the way) that I had on it, saving another $75/mo.

    Anyway, what problems, if any, do you think I'm going to have during my Ch 7 w/ these cars/car payments? No issue at all? I am below the median income if that matters.

    Thoughts/opinions?
    Stopped paying CCs 1/10 | Stopped paying mortgages 2/10 | Interviewed attorneys 3/10-5/10 | Retained attorney 5/14/10 | Delivered paperwork to attorney 6/17/10 | Filed Ch7 7/9/10 | 341 8/16/10 | Objection Deadline 10/15/10 | DISCHARGED 10/20/10
    Tags: None
    #2
    You asked for thoughts and opinions, so please do not take offense.

    Reaffirming 1150 in car payments for the next 5 years, plus the higher insurance cost these vehicles will cause, and being under the median income for a chapter 7 is CRAZY!! You also mentioned in another post you have 100K in student loans, that you will be paying as well after your CH7 is over. All of this should play into the decision you make for your plan going forward.

    The federal standard is 489 per month (i believe) for 2 cars. You will have to have the reaffirmations approved by a judge most likely, and I doubt this would be approved, as it sounds like financial suicide and not a feasible plan going forward.

    Filing BK is your chance at a clean, fresh financial start. I don't understand why so many people want to strap themselves down by reaffirming such high debt. But, this is only my opinion and like other things...everyone has one.

    I seriously do not mean to offend, so please don't take it that way. Put lots of serious thought into your plan, and discuss this with a attorney. The attorney has a better idea of what will fly in your district than I would.

    I wish you the best, AND a financial fresh start.
    Last edited by NoMoreCards; 04-20-2010, 09:20 AM. Reason: Seen info in another post, wanted to add comment.
    8-07-09-filed Chapter 7
    11-18-09-DISCHARGED!!

    Life is not what challenges you face, but how you face those challenges.

    Comment

      #3
      NMC - No offense taken, I'm asking for opinions & I got just that! It is my understanding the federal standard is $489/each for car payments? I wanted to keep these cars as I need reliable transportation that I'm not going to have to replace in the next few years as I won't have the credit/$ to do so. Also, if I was forced to replace these cars, I have NO IDEA how I would do so. I have $25 in my savings. I can't see myself being nickle & dimed to death by a pair of crap autos. I thought this would be a decent way to help rebuild?

      Anyone else?
      Stopped paying CCs 1/10 | Stopped paying mortgages 2/10 | Interviewed attorneys 3/10-5/10 | Retained attorney 5/14/10 | Delivered paperwork to attorney 6/17/10 | Filed Ch7 7/9/10 | 341 8/16/10 | Objection Deadline 10/15/10 | DISCHARGED 10/20/10

      Comment

        #4
        I believe they amount is $489.00 per car. Since your 2010 Ford is more than $489 they will probably not count that overage in your expenses.
        Attorney Retained/Paid: 1-4-10
        Online CCC-Completed & Cert Received: 1-8-10
        Filed Chapter 7 1-18-10.
        341 3-10-10 ~~~ Last Day to Object: 5-10-10

        Comment

          #5
          Originally posted by AlmostAmos View Post
          NMC - No offense taken, I'm asking for opinions & I got just that! It is my understanding the federal standard is $489/each for car payments? I wanted to keep these cars as I need reliable transportation that I'm not going to have to replace in the next few years as I won't have the credit/$ to do so. Also, if I was forced to replace these cars, I have NO IDEA how I would do so. I have $25 in my savings. I can't see myself being nickle & dimed to death by a pair of crap autos. I thought this would be a decent way to help rebuild?

          Anyone else?
          You can still get a reliable car financed right after discharge with no money down. You need to utilize this opportunity to walk away from that insane car payment. I just recently received my discharge and I stopped paying on my $650.00 car payment. It wasn't reaffirmed so I can just walk away with no liability and that's what I'm doing. I'm cleaning up my credit now before I apply for financing. Here is an excerpt from a posting under "new car" under "buying a car after bk"...."So on on whim we stopped by the ford dealer, all I can say is HOLY CRAP, We got a 2010 escape Limited AWD loaded.
          Here is the best part 1.9% financing for 72 Mo's. no money down and got a traitor rebate of $1500.00. Both of our credit scores are in the lower 6oo's."

          I plan on dropping my car payment by about $400 a month. Good luck to you.

          Comment

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