Should I file for Chapter 7?

[mre0609]

I received a civil summons for a $13500 auto loan I defaulted on from 2008. I turned the vehicle into the bank and they sold it, so this is the balance I owe. I live in NC, so I know they will not be able to garnish my wages, but I'm afraid they will be able to freeze my bank accounts. My paycheck is direct deposited into my checking account every month, and my employer requires a direct deposit, so I am afraid that even though they cannot garnish my wages, they can garnish my bank account which has my paycheck direct deposited into it. Should I just go ahead and file for Chapter 7 bankruptcy? I also own a home that I don't want them to put a lien on.

I offered to make monthly payments for the bad debt, but the bank or their lawyer won't hear of it, plus they want all of the attorney's fees, etc. My credit is already ruined by this charge-off. So bankruptcy seems like the only option right now.

[keepmine]

DO you have other debts that are eligible for discharge?
Do you know if, you quaify for a 7? What's your income and the equity in your home?

[mre0609]

I have one credit card that has $700 charged on it, but that is all the unsecured debt I have. My house payment is $480, it is thru owner financing. I am current on that payment. I bought the house in June of 09 for $90000, i paid $10000 down.
I have one vehicle payment on an 04 Accord of $356/month. That is current. I owe $7000 on it and the blue book on the car is around $13000.
I also have a 98 Camry that is paid for. It has 300k miles on it, so not much value there.
That is all I have. I have an appt tomorrow for my consultation with a bankruptcy attorney.

and my income is $2700/month before taxes.

[keepmine]

Here's a link to the latest homestead exemption in NC.

http://www.bkforum.com/showthread.php?t=43182&highlight=north+carolina

Here's a link to the other exemptions. They hadn't updated the hometead on this site. Looks like you may some issues with the quity in your car.

http://www.thebankruptcysite.org/exemptions/northcarolina.html

One issue your lawyer needs to settle is, make darn sure your mortgage holder properly perfected the lein in the proscribed timelimit in NC or that house is in danger of being snatched away from both you and your lender.

[drowning123]

Wow, MRE, seems like you're doing OK financially, except for that darn judgment. It's a pity you'd have to file Chapter 7 with such a stellar credit history. They really won't work with you at all?

[mre0609]

The person I spoke with at the bank was rude and made me feel like I was a horrible person for not paying back the loan. I told him I would be willing to make a monthly payment but couldn't come up with the whole lump sum. I even said he could set up an automatic withdrawl from my paycheck. He told me to contact their attorney, and I have left several messages with the attorney and his paralegal, with no call back. It's like they want me to suffer. I am not a bad person, just made a stupid mistake of signing for a vehicle for my boyfriend at the time, who then just up and left.

What would be a reasonable offer to the bank to settle if I can convince them I will pay. I have been reading that banks usually won't settle on a secured loan?

[drowning123]

Why not write the attorney to set up a monthly payment plan? Just make sure you don't pay them more than you can afford monthly. Help me out here, folks. Would she have to work with the courts to vacate the judgment after she pays it off eventually? Thanks.

[tcreegan]

deficiency

Hi all,

What mre has is a deficiency. Lien on the house really has no effect until you go to sell the house or try to get a home equity loan (usually bad idea anyhow). Best course at this point might be to have her attorney twist arm of bank attorney to get an affordable payment plan set up. BK would make the credit score worse, there are questions on the house, and there is about 7K of vehicle value over the exemption amount.

But......income qualifies for Ch 7, 13K is a lot of $$, and if loan on the Honda stays current keeping the car is not a problem.

idea: you have to take a class on finances before you file BK, so why not take the class and get some impartial financial advice? Check the BK court website for a list of approved agencies.

Tom in Colo

[mre0609]

Well, I decided to file bankruptcy after speaking with an attorney. The bank and their attorney that the original loan is with refused to accept my offer to make payments or settle. My bankruptcy attorney said they could eventually get a lien on my home if they get a judgement against me. I don't plan on living there forever so I don't need a lien coming back to bite me in the butt. I had my consultation yesterday, turned in all of my forms today and I go on Sept 8th to sign my final papers. I get to keep my house and my 2 cars. I can't wait till all of this is over and I can put this behind me.

[drowning123]

Don't forget to file a motion to vacate the judgment after you are discharged.

[mre0609]

I don't have a judgement yet. I received my civil summons on Aug 19, so i have 30 days before they can file a judgement. My attorney said he would have my case filed before the 30 days was up.