Surrendering 2 cars, what will I drive?

[helpmeJC]

Wife and I will file joint Chapt 7 soon in WA State.

I have 2 cars with payments from a local Credit Union
I also have a $7k line of credit with that same credit union

My atty said because the cars are cross-collateralized that the CU will take them both in my BK if not sooner by repo. I looked at the loan papers and he is correct about cross-collateralization. I was hoping to keep making payments on one and keep it, but he said that will not work, prepare for surrendering them. I owe $10.5K on one and $38K on the other.

Not really any equity in them and the auto exemption is $2500 for one, $5,000 for 2 for joint filers in WA state.

He said I might be able to go out and by a used car before filing BK and then be able to keep it.

Do I have to look for a $2,500 or less car then?
I am freshly unemployed but looking for a job.
My credit score is still 740 as I have not defaulted on any loans (will in 2 weeks though) Would it be fraud to get a car loan on a car if I am unemployed? Any creative ideas on what I can do for a car?

I only have a little cash and plan on using that to pay for food, utilities and my house payment until I get a job. I have $85K equity in my house (WA has a $125K homestead exemption, really!) so I do not want to default on the house payment. Please wish me luck finding a job in the next 30 days or so.

Thanks for any help, this forum has already helped me ease my fears.

[JRScott]

Personally I would not file until after you obtain the new job, just in case.

I do hope you find a job soon.

If you can get someone to loan you money for a car, that would help you out I'm sure but without proof of a job I'm not sure they would. You might have to get an older car that you can buy outright for 2500 or less. Is there a family member who might could loan you a car for the next few months? That might be a route to go too.

[DaisyMae]

If you keep the payments up, what is the issue?

They (the trustee nor the creidt union) don't want your car if there is no equity in it, and having a car payment helps your qualify for a CH7. Even if you have a loan at that credit union that you are discharging, and file BK- they are not going to repo your car if you continue paying for it and advise the court you are going to reaffirm that debt. But if you are way upside down on the vehicle, you'd want to give it up. So why are you going to give that car up, and scramble yet to find a new car and a new car payment? This sounds like chaos...

[StartingOver08]

I have negotiated with a credit union to remove the cross collateralization. You just have to ask. But you have to have already filed BK to ask. Also I was prepared to give up the car if they did not agree to remove the cross collateralization. They agreed. At the same time we reduced the payments, the interest rate and skipped a month. Attorney's don't tell you this usually.

[helpmeJC]

Thanks for the responses.

I have a asset, a 14x7 cargo trailer fully paid for worth about $2,500
Can I trade this in or sell it for a $2,500 car BEFORE I file a BK, will I have a exempt car then?