Car 8 months from paid -- when to file?

[stressedinTN]

I have 8 more payments left on my used car. Any thoughts on whether I should try to delay filing until it's paid off? Is there any risk of being a few payments away and having the credit union refuse to reaffirm? It's a 2004 Honda Civic.

Thank you!

[AngelinaCat]

There is a mortgage on your car. That is a GOOD thing. File ASAP if you can, as this mortgage will be a debt that you list in you debtor paperwork, and the trustee won't be interested. We had 10-14 months left on our car note. I don't remember the exact amount, but it was not a problem.

We had two cars that were far too old for the trustee to be interested in. We also had a 1968 Chevy Impala sedan that could have been a potential collector item. Once I explained in the 341 meeting that it had been parked in the garage four years prior to our filing because of bad brakes, and then lost ability to work on it, and that the green color it now was, was MOLD, not the actual blue paint it actually was, the trustee lost interest.

How was that for a long run-on sentence? Best of wishes to you!

[LadyInTheRed]

Don't worry, the credit union will allow you to reaffirm. It is the creditor who benefits from reaffirmation, not the debtor.

[stressedinTN]

Thank you so much to both of you! These forums are a phenomenal source of information.

[TXskyblue]

You may consider buying a new car. BK is a long journey, and a 2004 vehicle may not last. As a plus, a new vehicle is a bigger item to place on your means test, whereas a car almost paid off is very small.

[stressedinTN]

Thank you for the suggestion. It is an old car. How does it work, though, to get a car loan right before filing? Would that create problems and look like you didn't intend to pay?

[LadyInTheRed]

But, you to intend to pay and you will say that on your statement of intentions. The issues that apply to incurring debt before filing BK are different for secured debt. People buy cars before filing BK all of the time without issues. It is an especially good idea if you file Chap 13. But, if you file a Chap 7, it depend on what your current credit scores are and what kind of interest rate you can get right now. If your credit is so terrible that you can only get high rates, it may make sense to wait until after a Chap 7 to finance a car.

[stressedinTN]

That's so helpful. My credit is actually really great, above 700,so I should be able to get a car loan.