Okay, this is a mess, so please bear with me. Filing Pro Se is our only option, so it has to be this way. We are doing a chapter 7. I am just beginning. I am planning to use a paid preparer, but I want to be sure I am providing all info necessary.
Here's the deal. On June 12, 2010 we were rear ended in our van. The person originally wanted to pay damages themselves, but later opted for insurance to do so. AllState cut a check for the damages, $2600, on June 25, 2010. Now here's where it gets sticky. On June 24, I was served for a judgement on a personal loan that I had with credit union who also has this van financed. I was set to take the judgement on the loan without dispute but two days before court, July 8th, I found out that the van was cross collateralized with the personal loan. So even though that is an unsecured debt, I can not get the title for the van until I pay both debts. We had opted not to fix the van, as damages were fairly minor and cosmetic and we had other expenses we felt were more important (power, medicines, groceries, rent, etc.). We figured when it was paid off next year, we could do that. Or we could sell it as is. Now, if I file bankruptcy, Chapter 7, I am being told that if I keep the van I will still have to pay the personal loan as well. That means I will be paying far more than the van is worth, or ever has been. My question is this: On the insurance money that was paid to us in June, when we had every intention of keeping the van, we used it to pay necessities and catch up. What will happen with that? If we surrender the van to keep from paying almost double what it's worth, will I owe the $2600 that the insurance company paid us to them? Or do they get it in as is condition if we do not reaffirm and surrender? Or if they repossess? Is it any different in either situation? I have talked with the credit union. I am told there are no plans to repossess unless we fall behind. Or if after we pay off the van but we do not pay the personal loan, they will repossess the van anyway, even though IT is paid off.
I hope this makes sense. I never had any idea that cross collateralized agreements existed, much less knew what I was signing at the time. My concern is having to pay back the $2600, even though I am filing chapter 7... Should we let it be repossessed or surrender? I can't get the van fixed now because the money is gone.
Sorry for talking in circles. Kind of how my brain is working right now.
Here's the deal. On June 12, 2010 we were rear ended in our van. The person originally wanted to pay damages themselves, but later opted for insurance to do so. AllState cut a check for the damages, $2600, on June 25, 2010. Now here's where it gets sticky. On June 24, I was served for a judgement on a personal loan that I had with credit union who also has this van financed. I was set to take the judgement on the loan without dispute but two days before court, July 8th, I found out that the van was cross collateralized with the personal loan. So even though that is an unsecured debt, I can not get the title for the van until I pay both debts. We had opted not to fix the van, as damages were fairly minor and cosmetic and we had other expenses we felt were more important (power, medicines, groceries, rent, etc.). We figured when it was paid off next year, we could do that. Or we could sell it as is. Now, if I file bankruptcy, Chapter 7, I am being told that if I keep the van I will still have to pay the personal loan as well. That means I will be paying far more than the van is worth, or ever has been. My question is this: On the insurance money that was paid to us in June, when we had every intention of keeping the van, we used it to pay necessities and catch up. What will happen with that? If we surrender the van to keep from paying almost double what it's worth, will I owe the $2600 that the insurance company paid us to them? Or do they get it in as is condition if we do not reaffirm and surrender? Or if they repossess? Is it any different in either situation? I have talked with the credit union. I am told there are no plans to repossess unless we fall behind. Or if after we pay off the van but we do not pay the personal loan, they will repossess the van anyway, even though IT is paid off.
I hope this makes sense. I never had any idea that cross collateralized agreements existed, much less knew what I was signing at the time. My concern is having to pay back the $2600, even though I am filing chapter 7... Should we let it be repossessed or surrender? I can't get the van fixed now because the money is gone.
Sorry for talking in circles. Kind of how my brain is working right now.
Closed November 2010
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