Couple quick questions that just came up

[sleepless2]

Hi, I Filed on 1-13-15, I mentioned in my previous post when i met with my attorney to sign my paperwork for a chp 13 he said no this is a 7 you passed the means test. up to this point I anticipated a 13- He did ask we about reaffirming my house and cars an my initial thought was yes. 2 cars 1 2007 hyundai tuscon owe about 6k worth about 5k. 2nd car 2014 kia sedona owe 30k worth 16k -KIA really dosent hold any value. The first car my daughter uses to get to vocational school it requires a lot of maintenance but it is doable. Th Kia has been a lemon since day one- in the shop numerous times etc.. I have to have something for the family vehicle and work. My Payment gor the Kia is 465.00 per month - Other reason I had to go with Mini van is I take my elderly parents everywhere now that they cant drv anymore.

Question 1 Should I call my attorney and tell him I dont want to reaffirm the Van? And I just want to continue making payments. Then in 6-8 mo after discharge quit making payments and surrender the van. Look for something cheaper from a buy here pay here place?
My Loam is through US Bank in Ohio - I wouldnt think they would be running to collect on a 30 debt that is worth 16k? Thoughts?

Question 2 When I filed I had 0k in my health Saving account. I just looked at my pay statement for next week (get paid on Thursday) My employer contributes a percentage of what we contribute at the beginning of the year. I now have 400 in that account? I would like to use that to catch up on a car payment. Does anyone know if this should be turned over - Honestly dont really care if they want it- I just wanted to be clear on what the rules are? It would help me to catch up though.

Thank you for your help / support.

It is truly a relief not to have the creditors calling every hour....

[Drazil65]

Hi, hopefully you are reconsidering any reaffirmations, home or vehicles, just continue to make the payments on the home and the cars you want to keep. Search and read everything you can here on the forums regarding reaffirming before you do anything. It is rarely a good idea to reaffirm especially your house. You will be fine if you just keep making payments.

[avengers]

Question 1 Should I call my attorney and tell him I dont want to reaffirm the Van? And I just want to continue making payments. Then in 6-8 mo after discharge quit making payments and surrender the van. Look for something cheaper from a buy here pay here place?
My Loam is through US Bank in Ohio - I wouldnt think they would be running to collect on a 30 debt that is worth 16k? Thoughts?

This seems like a really really really bad idea. What you're proposing involves getting the car repo'd after your BK. That will absolutely wreck your credit score. And I have no idea why you think they won't go after you for the debt. It's a secured debt. Let's say they repo the car and sell it for $16k. Do you think they are just going to say, "hope you enjoyed the car" and leave you alone? No way. You are going to be personally responsible for the remaining $14k of debt and you have no way to discharge the debt because you just filed chapter 7.

The entire purpose of filing Chapter 7 is to eliminate debt. You're proposing to not only keep debt but to deliberately default on the debt until a point in time when you are not legally allowed to discharge the debt.

Start saving for a used car now and stop making payments on car that you have no plans on keeping.

[sleepless2]

This seems like a really really really bad idea. What you're proposing involves getting the car repo'd after your BK. That will absolutely wreck your credit score. And I have no idea why you think they won't go after you for the debt. It's a secured debt. Let's say they repo the car and sell it for $16k. Do you think they are just going to say, "hope you enjoyed the car" and leave you alone? No way. You are going to be personally responsible for the remaining $14k of debt and you have no way to discharge the debt because you just filed chapter 7.

The entire purpose of filing Chapter 7 is to eliminate debt. You're proposing to not only keep debt but to deliberately default on the debt until a point in time when you are not legally allowed to discharge the debt.

Start saving for a used car now and stop making payments on car that you have no plans on keeping.

Well I appreciate your reply but in talking to my attorney today you are incorrect. If I do not reaffirm the loan - and most likely the judge will not approve the reaffirmation anyway, this is commen. The attorney says allot of the people do this. Continue to pay and if they want a vehicle that is 14k upside down they have the rite to take it, but it is very unlikely they would want it. Also my attorney stated the creditor has no recourse but to take the car if i do not reaffirm weather it is after discharged or not. Also I double checked, you are 100% incorrect saying I would be responsible for the remaining 14 k of debt.

I ask for any other input from the forum, But my attorney says this happens quite often if people do not reaffirm. The lender has the option to reposes but very seldom does and would be nuts to do so. He said I can not be charged for any other fees such as repo or storage fees also. Also he confirmed if the car is part of the chapter 7 their is no difference to my credit report or not if I give it back at a later date.

Please let me know if anything does not sound correct but I think according to my attorney the above post is way off base?

[avengers]

Well I appreciate you reply but in talking to my attorney today you are incorrect. If I do not reaffirm the loan - and most likely the judge will not approve the reaffirmation any way. The attorney says allot of the people do this. Continue to pay and if they want a vehicle that is 14k upside down they have the rite to take it, but it is very unlikely they would want it. Also my attorney stated the creditor has no recourse but to take the car if i do not reaffirm weather it is after discharged or not. Also I double checked, you are 100% incorrect saying I would be responsible for the remaining 14 k of debt.

I ask for any other input from the forum, But my attorney says this happens quite often if people do not reaffirm. The lender has the option to reposes but very seldom does and would be nuts to do so. He said I can not be charged for any other fees such as repo or storage fees also. Also he confirmed if the car is part of the chapter 7 their is no difference to my credit report or not if I give it back at a later date.

Please let me know if anything does not sound correct but I think according to my attorney the above post is way off base?

I had heard that ride-throughs are no longer allowed (at least in some parts of the country). But I certainly may be mistaken and if your attorney says you're OK doing that, he's much more likely to be correct than I am.

[LadyInTheRed]

sleepless2, you are correct that if you do not reaffirm the loan and the debt is discharged in your BK, you cannot be held responsible for a deficiency and the creditor cannot report the default on your credit report. The only thing the creditor can do is repossess the vehicle.

I had heard that ride-throughs are no longer allowed (at least in some parts of the country).

True, but there are ways to get around it. First, you can check "reaffirm" on your statement of intentions and then change your mind and not sign a reaffirmation agreement. The creditor might then petition for relief from automatic stay, but they are more likely to wait until after your case is over and most will not repo as long as you keep making payments. Another strategy is to sign a reaffirmation agreement and hope the judge won't approve it. A judge is unlikely to approve a reaffirmation agreement for a loan with a balance that is twice the value of the collateral. But, the debtor has followed through with the intent to reaffirm which will often prevent repossession. It is also possible that if you check "surrender" but tell the lender that you will still make payments, they won't repossess. What strategy is best will vary by court and your circumstances and should be discussed with your attorney. One thing to remember is that if you indicate you will surrender the vehicle, your car payments may not be allowed as a deduction on the means test.