Negative Equity in Vehicle

[Surrender]

I own two vehicles which I intend to reaffirm the loans on. One is used specifically for work (sales) the other is my personal use. I have negative equity in both vehicles. One is to the tune of $8 Grand.

Can I discharge the negative equity in these loans? Do I have to negotiate this with the lien holder? Am I asking for big trouble?

Thanks for all the help.

[InDebtInMD]

I'd say you are good to go since you are doing Chapter 7. Since you do not have any 'equity' in either of these vehicles there would be no point in the Cphapter 7 Trustee selling them off to pay creditors, since he would even get enough to pay off the bank holding the lein.

[StaciMM]

In ch. 13 (until 10-17) you can 'cram down' negative equity. In ch. 7, there is no such provision.

Why reaffirm, unless your state requires it? In many cases, you can keep making your payments without giving up the BK protection. (So later, if you no longer need a vehicle, you can give it back.)