Will filing for BK dissolve this odd loan of mine?

[Sonic]

Hello,

First post ever!

Long story short, I'm 29 years old and I've dug myself into heavy, heavy debt. After getting laid off a few years ago, and trying to help out my struggling mom, it was enough to get me into nearly 23,000 dollars in debt. All from credit cards. Eventually I stopped paying them off because....I couldn't afford to. That's not including my 'car loan'. I'll get to that in a sec.

Now I'm getting my life together and I've decided to file for BK very soon after talking to a lawyer after a free consultation. However, i didn't mention this complicated matter with my loan and I hope some of you out there can help me out:

About 3 years ago, when I was in milder debt, still paying off the cards and still had decent credit, I decided to consulate my most of my credit card debt into a load. At my credit union, the person told me to get a car loan because the rates are cheaper. I already paid off my car mind you and went it, and it was approved for 7 grand.

My question is:

If I go ahead with the bankruptcy (Chapter 7), it'll clear out my loans. HOWEVER, this loan ON THE RECORD is a car loan. What should I do to clear it, or am I stuck with it? I mean I do have the pink slip after all, so that's proof that I already paid if off right? It feels like I should've not listen to the lady and just get a normal bank loan from the get-go.

[despritfreya]

If you used your vehicle as collateral to take out a loan and the lender perfected its lien (usually a notation of the lien will be on the title and/or the lender took possession of the title), the lender is a secured creditor. If you file a Chapter 7 you have three choices:

1. Surrender the vehicle to the lender and pay nothing further.
2. Redeem the vehicle from the lender by paying a lump sum payment equal to the value of the vehicle (or some agreed amount)
3. Reaffirm the loan and continue to make your normal monthly payments.

Option 3 may requires a separate agreement between you and the lender. Just depends how your district handles such things.

Bottom line is that if the lender is secured and you want to keep the vehicle, you will have to pay for it.

Des.