Chap 7 - Unemployed - Any Danger in REAFFIRMING rent/lease and car payment?

[gman]

I am currently unemployed and filing a Chap 7 soon.

This will be a no asset case.

I have been "current" on my home rental and car payments.

I am running low on cash.

If I run out, my family will likely start paying these bills until I get back on my feet.

Is there any danger that I file a Chapter 7 and am forced to either break the home lease and/or surrender my car?

I have logical reasons for keeping both the rental home (custody issues) and the car (very low interest rate - paid off in next 18 months - runs fine.)

If so - is there a situation you know of where this occurred?

I am planning for the worst and hoping for the best!

Thanks to all who respond.

[justfiveofus]

As far as the car you can request to reaffirm the debt, but the court may not allow it if you're unemployed. Also, if you decide you want to keep the car usually the bank will let you keep it without reaffirming as long as you're current on the loan. If you don't reaffirm and something happens and you can't make the payments then you wouldn't be responsible you could simply give the car back to the lender.

We have two vehicles that we were going to reaffirm, however after speaking with our credit union we decided to just keep paying on them. The credit union said as long as our payments are current that they have no problem with us keeping the vehicles and not reaffirming.

[readytofile]

I seriously doubt they will allow you to re-affirm the property. That being said, if you tell them that you want to ride-through by continuing to make payments and that you have no intention on turning over the property they will allow that. You can keep the stuff as long as you pay. You really do not want to sign any kind of re-affirmation agreement if you don't know where your next paycheck is or isn't coming from.

[gman]

I seriously doubt they will allow you to re-affirm the property. That being said, if you tell them that you want to ride-through by continuing to make payments and that you have no intention on turning over the property they will allow that. You can keep the stuff as long as you pay. You really do not want to sign any kind of re-affirmation agreement if you don't know where your next paycheck is or isn't coming from.

Question: Do I need to get written approval from my credit union to do a "ride-through" prior to filing? I am not sure how one gets a ride-through so any explanation on the process itself would be awesome.

Question: I just got a written quote to sell my car to CarMax for $9,000 (no purchase of a new/used car required). My outstanding loan balance as of today is $7,568 - so I actually have $1,432 in equity. Will this come into play in a positive or negative manner in regard to doing a ride-through? I truly have no other assets over standard state exemptions. I only have until Feb - 2012 to pay this off in full given my current payments.

[justfiveofus]

Are you filing yourself or using an attorney?

If you're filing prose make sure you claim the exemption on the equity in your vehicle on your schedules.

No you don't have to have written approval from your credit union to do a ride through prior to filing. Call the credit union and talk to someone in their bankruptcy department. We found on guy in ours was a total *** but when I asked to speak to his supervisor she was VERY nice and answered all of our questions in great detail.

[gman]

Are you filing yourself or using an attorney?

Very likely PRO SE.

If you're filing prose make sure you claim the exemption on the equity in your vehicle on your schedules.

No you don't have to have written approval from your credit union to do a ride through prior to filing. Call the credit union and talk to someone in their bankruptcy department. We found on guy in ours was a total *** but when I asked to speak to his supervisor she was VERY nice and answered all of our questions in great detail.

I will claim the equity - and call my credit union for guidance.

Thanks!

[tcreegan]

contact CU

Hi gman,

Contact the CU early and often to let them know that you are going to keep the car and keep current on payments, insurance, registration.

They may knock you off online access, not send anymore statements, or notices b/c it could be construed as violating your BK protections.

Be proactive and find out were to mail the payment. Just do it yourself every time it is due. Don't be late.

Technically, as long as you stay current, you are not in default of contract and therefore not subject to repossession.

Good luck with this,

Tom in Colo

[OhioFiler]

Very likely PRO SE.



I will claim the equity - and call my credit union for guidance.

Thanks!

I would strongly urge you not file pro se unless you invest more time in understanding the process.

Good luck to you.

[justfiveofus]

If you have a no asset chapter 7 case, and you're willing to spend time educating yourself filing prose may not be a bad way to go. We filed pro se two months ago and should be discharged in the next couple of weeks. Our trustee has been helpful, the court clerks office has been helpful. We have had a couple of bumps in the road and have had to amend a couple of schedules however I would do it myself again if I had to. But yes I have had to spend a lot of time reading online about different rules and laws.

Also, our credit union did say this, that they would put a stop on our debit cards if we'd had them however we don't on this account. They did stop our auto withdrawl but we've just been paying every month in a branch. As well, the lady that I spoke with said that they'd have zero problem setting back up the auto withdrawl for us if we wanted them to, from the credit union account or another account if we wanted.

[readytofile]

I would strongly urge you not file pro se unless you invest more time in understanding the process.

Good luck to you.

I agree 100% It can be done but you have to do your research. I let my attorney handle it. I stopped paying my credit cards and put those payments into the bank and had the attorney's fees paid within 3 weeks.

[debthelper]

I believe it depends on the amount of equity you have on your rental property and the value of you car. If you are paying for a $40,000.00 Cadillac the creditors are going to have a problem with that and wonder why you don't get rid of that car and pay them instead. If you are planning on getting back on your feet soon, like within 6 months, just skip filling bankruptcy and when you get back on your feet have your lawyer or a credit counseling service renegotiate what you owe and you will be able to pay off the creditors by about half what you owe them now. If by that time all your debt is owed by debt collectors you can probably settle with them for 1/5th what you owe them. Never pay debt collectors what they say you owe them, they bought that debt for pennies on the dollar and will be happy getting anything out of you since it is basically all profit to them. If they bought $1000 worth of your debt they probably paid $50 for it, make them an offer of $150 or $200 to close the account, they will more than likely take it. Make sure you get it in writing!! Don't pay over the phone like they will want you to cause if you do they will just say that they never had that conversation with you and continue to come after you for the rest.