Bankruptcy experts--I need your advice! :o)

[MzDandylion0527]

Hello all, I have been teetering on the fence of "to file or not to file" and I have a few questions. First, let me *briefly* explain my situation... *After a brief period of unemployment followed by the death of my husband my credit score tanked (into the high 400's) *During this time I fell behind on my car note. Also, the car was in an accident that caused major engine damage and after the insurance paid for the body work they refused to acknowledge/pay for the engine repair. I had to let them (Honda Finance) come and pick up the car because I could not afford to replace the engine. *Before the "voluntary repossession" of my car I was able to purchase a used 2003 Nissan Altima which I now know has some major mechanical problems and may not hold up for too much longer. It was purchased "as is" with no warranty. What I later found out is *as is* means "lady don't buy this car its not worth the metal its made of" (so far has needed a crankshaft sensor, catalytic converter, and possible transmission replacement). I was just happy to get something moving after over a month of bumming rides. *I owe approximately 30,000 in CC's, medical bills, and the balance on my Honda Accord (7,900) *My payments on the 2003 Nissan Altima are current and never late. I suppose what I want to know is, it seems to me that filing chapter 13 is a better option to file over chapter 7 in terms of how soon you are able to have it removed from your credit (7 vs. 10 years) and the fact that you can purchase a home sooner (1 year in Chapter 13 vs. 2 years in a chapter 7). 1. If I include the "new" used car in the bankruptcy and it dies (which it likely will) what do I do for a car and will I still owe that balance of the financing? 2. Are you allowed to purchase another car while still paying on one included in bankruptcy? 3. Is it wise to file a chapter 13 if you fit the means test for a chapter 7? 4. How soon after you are discharged in a 7 can you purchase a new car? 5. Is it better to sign a reaffirmation agreement and keep the payments current and try to keep the car outside of bankruptcy and then try to get another one in three years with the 13 or four months after the discharge with a 7? This option doesn't seem to be a very good one--because I highly doubt the car will hold out another 6 months. 6. Can't the finance company still repossess the "new" used car even in a 13? I have talked to an attorney and pretty much feel I can file the case by myself. I don't want to keep calling the same attorney to ask for "free" advice and I felt this was the next best thing! HELP!!! Thank you

[Anonymous]

Qualifying Chapter 7 candidates who file Chapter 13 typically do so to protect assets. If you don't have assets to protect (items that don't fit into exemptions), C7 appears to be the best option for you.

Chapter 13 is commonly referred to as the "wage earner's plan". Your payments are based on your disposable monthly income and the length of the plan is often determined by your income (three years or five years). Do you want to commit to payments for the next three or five years when you could successfully discharge debt within three months (provided you're a C7 candidate)?  Is the seven vs. ten years of reporting ultra significant? Do you know you have to get approval to incur new debt while in a C13?

1. If you include your car in BK and you don't reaffirm the debt, you aren't personally liable. Some lenders offer a ride-through option (pay and retain). You can continue making payments without recommitting personal liability. You can also surrender the vehicle (stop making payments) without adverse affect (the debt is included in BK).

2. In a C13, you need to seek approval to incur new debt.

3. If you have assets to protect, a C13 may be advantageous.

4. Some people purchase vehicles post-filing/pre-discharge.

5. You can't keep outstanding debt out of BK. You need to list ALL debts (you will note intentions with secured debts -redeem, reaffirm, surrender).

6. Depends on your intentions/payments.

Many attorneys encourage clients to secure reliable transportation (that fits into exemptions) prior to filing (applicable to both C7 and C13). This is especially important in C13 cases where time (3 or 5 years) coupled with the inability to incur new debt without approval exists.

If you're pondering BK, meet with a few more attorneys (most offer free consultations). If you intend to file pro se, please research this. Pro se no asset C7 filings are far more common than C13.

[scrubs]

last year i file for bk, march 31 2009. at the time my scores were about the same as yours. now my scores are now in the low 700 range. there is light at the end of the tunnel, only if you pay your bills on time and use credit wisely. as for a new car with your credit score is slim too none that you will be approved, if by a slim chance, if you are the interest will be very high about 15 to 19% and will go thur a 3rd party company that go after people after bk, just like some credit cards company that charge 250 dollars or more to get a cc. and the reason they go after people with bk because you can not file again for 8 yrs and if you default on them they got you. my advice too you is if you file for ch. 7 or 13 do your homework and learn, take small steps and do credit repair, be debt free and pay your debts dont carry a balance. and read this forum and other forums too help you understand about bk and life after bk. good luck!!!!