Voluntary Repossession before BK?

[chuyelchulo]

So I had my BK consult yesterday....he is a really good lawyer. I was actually referred to him by a family member. However, I was telling him of my trials and tribulations with my current car on which I owe about $9,400. It is only worth about 7k, I suppose, so to him it's not worth trying to sell it to CarMax and come up with the deficiency of what they don't pay. It's been in the shop a lot ever since I bought it. He seems to think I should just voluntarily turn it into the creditor,(Navy Federal Credit Union) and include the deficiency in the BK. What do you all think about that? Couldn't I just wait and put it in the BK all together? Wouldn't that be a repossession on my credit PRIOR to bankruptcy?

[keepinitreal]

Make sure you have another reliable car before you consider surrendering your car.
I surrendered my car to my credit union because I found out it was cross-collateralized with a much earlier loan with the same credit union.
The credit union sold the car and then billed me for the deficiency.
That deficiency debt was wiped out by my Chapter 7 filing.
Good luck. Planning ahead is key!

[chuyelchulo]

Make sure you have another reliable car before you consider surrendering your car.
I surrendered my car to my credit union because I found out it was cross-collateralized with a much earlier loan with the same credit union.
The credit union sold the car and then billed me for the deficiency.
That deficiency debt was wiped out by my Chapter 7 filing.
Good luck. Planning ahead is key!

Yea, my attorney told me that Navy Federal does cross-collaterize, but I don't have any other debt with them. When you surrendered the vehicle, did they get nasty and try to close your accounts? And did a repossession appear on your credit report? I realize that BK looks bad enough on one's credit, but wouldn't a repossession look less positive as well? Lol

[keepinitreal]

When you surrendered the vehicle, did they get nasty and try to close your accounts? And did a repossession appear on your credit report? I realize that BK looks bad enough on one's credit, but wouldn't a repossession look less positive as well? Lol

Yes, my credit union closed my account 4 months after I returned my car to them.
Before I returned my car, I opened a new checking account with another bank so I only had $5 in my credit union account.
If you get behind on your car loan payments, the credit union is allowed to take the money out of your savings/checking account without your permission.
It's called the right of setoff.

I didn't really consider the impact of the repossession on my credit report. Since I was insolvent and going to file bankruptcy, my credit score didn't matter to me.

[chuyelchulo]

Yes, my credit union closed my account 4 months after I returned my car to them.
Before I returned my car, I opened a new checking account with another bank so I only had $5 in my credit union account.
If you get behind on your car loan payments, the credit union is allowed to take the money out of your savings/checking account without your permission.
It's called the right of setoff.

I didn't really consider the impact of the repossession on my credit report. Since I was insolvent and going to file bankruptcy, my credit score didn't matter to me.

I figured they would. Lol and I have several other bank accounts elsewhere, where I DON'T have debt(thank goodness) I am current on my payments. I was just worried about future creditors seeing a BK, and repossession, especially since I plan to purchase another vehicle after this process is complete.