Ch 7 + NFCU + car loan

[spell6bound]

I am about to file for Chapter 7. No attorney -- using a free service.
I have two credit cards and a car loan with NFCU. I need to keep my car and am wondering the best way to go about this.
My car is currently upside-down; Valued at about 5k and I owe just under 8k and payments are current, however I am currently on a reduced pay/interest agreement for a year for all NFCU debts.

Am I supposed to reach out to NFCU prior to filing if I want to reaffirm? Do I speak to lending or bankruptcy?

Everything is pretty much done and this is the only thing that has me in a panic because I haven't found direct information on the process.

[flashoflight]

spell6bound You really, really need an attorney because you are about the screw yourself over big time trying to do this pro se for free. Did you forget to read the original car note? It is absolutely incorrect to say you owe $8k on your car. You owe the $8k + both credit cards + interest on the car + interest on the cards just to keep your $5k car. If you reaffirm, you keep all NFCU debts and they can repo your car just for the credit card alone going past due. There is a thing called cross collateralization in credit union loans where your secured property is collateral for all loans and credit cards including unsecured products. What other gremlins are there in your case that could screw yourself over? There are options such as giving the car back then buy a beater which is basically what you drive now. You can also do a 722 redemption if you can get NFCU's cooperation but you will need a lawyer too.

Personally, I would keep your case simple and just give the car back so you don't have to pay for an attorney and continue pro se assuming everything else about your case is super simple. Super simple means no real estate, well below median income, no assets that can't be covered by an exemption. It's just a car. Go buy another one. Cars are disposable. Use the money you save not hiring a lawyer for the next beater car. You might be able to drive the current car for free for a few weeks or even months before NFCU orders the repo man to get it due to the automatic stay. Once you file, I wouldn't make anymore payments to NFCU. Yes you will lose access to credit products at NFCU going forward for life but oh well.

[justbroke]

As flashoflight mentions, welcome to cross-collateralization. Being able to cross collaterilize loans and property is a big way that credit unions (CUs) are able to offer really good services. Unfortunately, the agreements almost always cross-collateralize debt and especially cars!

It's a tough decision, but you may be able to get NFCU to remove the cross collateralization from the car and discharge the other debt. You will no longer be a "credit" member of NFCU as you'll be blacklisted from opening any credit account unless and until you pay off any of their losses. (That's the other thing about credit unions. While they can be generous with lending, they are bear to deal with when you cause a loss for the membership.)

Even more scary is that if you did receive a reaffirmation agreement from NFCU, you need to really scrutinize the terms. Reaffirmation agreements with CUs are a special case for normal reaffirmations (non-CUs), in that they are binding upon signature, and often without review.