I used my new car payment to help qualify

[jenopher]

My husband and I traded in our pai ford SUV and split the the cash to put down on two better gas mileage cars. Our atty was worried the trustee would see too much equity in a paid for newer car, plus we wanted a better gas car. We only had the one car plus a motorcycle at the time. Our atty was also concerned about us being so close on the means test and felt a car payment or two would help us out a lot.

Now we have two car payments, we passed the means test and went through the 341 last week with ease.

Can I give up one of the cars now? We are current on the payments and I could keep it. But we really only need one car and the motorcycle. I really would rather make double payments and pay off one car sooner. Don't get me wrong, I intended to keep the car when I bought it, and I thought I was doing well by choosing a less fancy car than I normally would have. Turns out I can do even better, and this is a slow learning process for me. I really want to take full advantage of this starting over opportunity and truly be debt free. We got a place 4 miles from DH's work and we don't need the other car. My only concern right now is since I used the payment to qualify for a chapter 7, if I give it up, what can happen? The 341 is over and we are only 6 day into the 60 day wait.

[laurannm]

Congrats on everything going smooth so far!

Did you sign reaffirm papers on the car? Assuming you didn't, IMO I would play it safe and wait until after discharge, and maybe even closing before giving it up. There is some gray area out there as to whether or not you are allowed to use payments on a secured asset you planning on surrendering as a deduction on the means test. If the UST discovered you surrendered the car before discharge it could cause problems (they may see it as bad faith)

If you did reaffirm and already filed signed reaffirm paperwork, you'll need to let your attorney know that you changed your mind and you'll have to rescind the reaffirm agreement.

[jenopher]

We have not reaffirmed, nor have we been asked to yet. We did state we intended to keep it on our paperwork. I think I will keep current on payments until discharge and then see where we are. Hopefully no one asks for reaffirmation before then.

[Help!]

If you had a successful 341 and are on your way to discharge, I'd do as Laurannm has suggested... don't reaffirm, stay the course until after discharge. It's just not worth the risk.

[liz417]

Hi there,

Would you be able to sell it for what you paid for it?

[jenopher]

I could possibly sell it. Todays market in So Cal is tough to sell anything. No one can finance anything. I made the August payment already. Only one more payment due before discharge. I can postpone a decision until October is due. I'm thinking of just keeping it. I did put 6500 down and have made 4 payments. If the budget gets too tight I can always work outside the home if only part time. Who knows, but I have till October to decide.