Considering Ch 7

[WTH12345]

Got a huge car payment, two CC with large balances, one personal loan with a med balance, owe the IRS over 1k this year, got divorced, and lost one of my jobs (25% of my income).

How did y'all pay for the attorney? I'm not going to reaffirm my car so how do I go about getting another car now or should I try to get one after the BK discharged? This is really stressing me out on how to go from here aside from knowing I need to talk to an attorney and soon. Any words of advice would be appreciated.

[justbroke]

There are many options, but let us first review your car options. Did you know that you "could" redeem your car in a Chapter 7? You could use the so-called 722 Redemption (named after the section of the bankruptcy code that allows such, 11 USC 722) and pay only the current market value of the car. Typically, this market value is auction value (average trade-in value) and it is determined as of the day you filed (or the hearing on the valuation, depending on your District). I used this to shave some $11-12K off one of my Chapter 7 vehicles! I used 722Redemption (a US Bank company) to obtain a new loan. While the new loan had a high interest rate (high teens), I was able to save a lot of money (again, $11-12K). I refinanced that loan in 6 months with Navy Federal for about 7.49%! Amazing.

As for affordability, you could stop paying things, including your car, and use that money. If you stop paying your car, you really need to understand your lender and how aggressive they may be. Most large banks aren't "too" aggressive while buy-here pay-here will be very aggressive. (Very aggressive to me is... one day late and they come and get the car.

You should start selecting 3-5 attorneys and obtain a free consultation with them. Go over your specifics. if you are working and need a car, you really need to have a solid strategy to either keep or obtain a new car.

(By the way the 722Redemption people at US Bank also allow you to buy a new(er) car rather than redeem your current car! I neither work for nor hold stock in US Bank.)

[TXskyblue]

I got on a payment plan with my attorney and also used my tax return refund to pay off the balance.

Stopping paying all my credit cards freed up money as well.

[WTH12345]

I don't think I even want to refinance the car I have because it would still be a high payment even if they redid it at market value with a sky high interest rate. I have found and been approved for another car already and am thinking about getting it.