Questions about home & car

[Freddy03]

I just want to make sure I ask the correct questions when we meet with the attorney next week.

We are hoping to file 7. We do have a house - Current on payments (have been late in the past) Loan for about 225K value est. 165k. We NEED to stay in the house. There are no other options.

We have one car payment. Balance 14.5K - kelly blue book has private sale price as $14k. I have about 3 years left of payments. We NEED to keep this car. Will never get a approved for another loan. And Dh's car is old.

I do not fully understand the reaffirm process. I don't mind reaffirming the car b/c I will keep paying the payments.

I do not want to reaffirm the house but don't want to lose it either.

Any suggestions?? What questions should I be asking the attorney next week?

Thansk!

[SMinGA]

When you meet with the atty discuss who your car loan is thru. Some lenders (Ford for example) may insist on a reaffirmation. Most don't and will allow you to keep the car as long as you keep payments current. For the mortgage, no state allows the lender to take back the house just because you did not reaffirm. Keep paying, and keep the house. You're still on title.

The danger with reaffirming? You are legally responsible for the debt after the bankruptcy. If you get transferred across the country and can't sell your house because you owe $60k more than its worth - you are stuck. If the engine on your car blows up and you can't afford to fix it, you still need to pay for it. You can't file ch. 7 for another 8 years and can't file ch. 13 for 4* so you'll be in a real mess if things go wrong.

On the other hand, if you don't reaffirm but keep paying - you keep living in the house, no problem. If later things change where you need to move you can just stop paying the mortgage a few months before you go (how long depends on the state) and won't owe a dime. If you can no longer pay your car, the lender can't come after you for $.

*You technically can file a ch. 13 anytime after filing/discharging a ch. 7. But you cannot receive a discharge in the ch. 13 unless at least 4 years pass between filings. So it would only benefit you to file 13 sooner if you could afford to pay off any/all new debts in full in the plan.

[Freddy03]

*You technically can file a ch. 13 anytime after filing/discharging a ch. 7. But you cannot receive a discharge in the ch. 13 unless at least 4 years pass between filings. So it would only benefit you to file 13 sooner if you could afford to pay off any/all new debts in full in the plan.

Thanks! I'm confused by the quoted part. Sorry my brain has been on overload since I have started this process.

I'm really trying to not do a 13 b/c with us not paying the CC now we would just be to where we could possibly start saving and pay bills on time.

Thanks again! I truly do appreciate all your help so far.

[SMinGA]

My point was the significance of not wanting to put yourself in a bind after filing ch. 7. If/when you file ch. 7 & get a discharge - you can't turn right back to bankruptcy if something else goes wrong financially. And being tied to a $225k house & $14k car is pretty risky in my opinion.

If you file now, reaffirm these debts and get discharged, and then all H*ll breaks loose - you're in trouble. You can't file again, you're stuck owing those debts. The rules on time between filings is:

After a ch. 7, you cannot file another ch. 7 for 8 years
After a ch. 7, you cannot file a ch. 13 (to receive a discharge) for another 4 years.

My * mark was to point out a technicality. You can file ch. 13 right after a 7 (without waiting the 4 years) but you can't get a discharge of debts. Say you file ch. 7 then fall behind on your house. But your income situation improves and you just need time to resolve the mortgage arrears. You could file ch. 13 - resolve the arrears in the plan - and it would not matter that you can't get a discharge because the debt would be paid in full in the plan. Plus atty fees, trustee fees of course.

[Freddy03]

OK got it. Thanks

I do not plan on reaffirming the house. But will stay current on the payments. The car I will reaffirm if it is required.

[SMinGA]

That is probably the best plan...