New Here (Again).. a bit nervous. general tips wanted

[amber78]

I have been on this site on and off for a while and just counting down the days until I got divorced and could file for Ch 7. That time has FINALLY arrived!

In the mean time I, along with my ex, have two vacant houses that are about to be foreclosed on, a pending small claims lawsuit (for a second mortgage), 2 payday loans in default, 40k in student loans and about 40k in credit card debt.  I CANNOT WAIT to file for BK.  My ex has refused to sign any paperwork regarding the houses, and because he has not been paying me much child support, ive been dealing with just food and shelter for my kids...

I have been working on cleaning up my credit reports the best that I can. I just got a $300 secured credit card from USAA and I have an 8k car loan (at 9% interest) from Ways to Work (a loan program for low income working parents). Im hoping I can keep these things

Im nervous and excited about filing for CH 7. I am wondering what is this all going to do to my score, what will happen with the lawsuit and the houses and will I be able to keep my car and my small CC (it has a zero balance)

In case you are wondering, my ex makes over 110k a year and does not qualify if he wants to file (or so I believe)

ANY HINTS, TIPS and INFO would be VERY MUCH APPRECIATED>

[0REDSOX7]

Unfortunately, you may be out of luck with the secured card. You cannot pick and choose which accounts are listed and which are not and you will have to list it.

USAA may decide to keep it open or they may close it. Can't really say.

Good luck to you. We've all been there and will be there when you get out of this mess.

[0REDSOX7]

Also, have you retained legal counsel for this or are you filing pro se?

[amber78]

Ive retained legal counsel. I just paid the fee today!

As far as the secured card, I just got it and put $300 down to open it with a $300 limit. Now Im thinking this was a bad move..

Im also scared about my car and not sure if I should reaffirm? or WHAT am I should do?  but i NEED my car.

[0REDSOX7]

Well - you have to list your secured card on the petition no matter what - can't get around that.

The lender may or may not chose to close it - but I'd get it to a zero balance before you file - this way you're not out the 300 bucks.

Your car, it's hard to tell.  Your state will have property exemptions and what not, but, DO NOT REAFFIRM.  EVER.  See if your state will allow what is called the "Other" option on your statement of intentions.  This is known as a pass-though - which means you must continue to make your monthly payments or they will reposses.  You will not get anything on your CR showing credit for these payments.  See if your lender allows it - some will require re-affirmation - but, you want to avoid at all costs.

[amber78]

Can I ask why reaffirmation is so bad?

I really feel awful about this car loan. I just made my first payment on it and I have every intention of following through with all payment.  The program is specifically for working people who are lower income and need a way to work.  The lady I worked with before she approved the loan told me the loan was to get people with bad credit back on track and to also allow them a lower interest loan (9%) then what they normally would get.  She made a big point about talking about dangers of BK... and because I NEEDED a car so bad at the time I shook my head in agreement and took the loan. SO now of course I knew all along I would most likely need to file BK after the divorce but of course I didnt tell her that. (ya I suck but I was desperate for  car)

So I guess what Im asking is.. I really dont want to screw this good company..

[ezdriver]

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@amber78 wrote:

Can I ask why reaffirmation is so bad?

I really feel awful about this car loan. I just made my first payment on it and I have every intention of following through with all payment.  The program is specifically for working people who are lower income and need a way to work.  The lady I worked with before she approved the loan told me the loan was to get people with bad credit back on track and to also allow them a lower interest loan (9%) then what they normally would get.  She made a big point about talking about dangers of BK... and because I NEEDED a car so bad at the time I shook my head in agreement and took the loan. SO now of course I knew all along I would most likely need to file BK after the divorce but of course I didnt tell her that. (ya I suck but I was desperate for  car)

So I guess what Im asking is.. I really dont want to screw this good company..

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When a reaffirmation agreement is approved by the trustee [yes, the trustee must approve it!], one loses all the protection of the bankruptcy laws for that tradeline. If a payment is missed and the car is repossessed and auctioned off, you will be liable for any deficiency between what the procees of disposition and loan balance.

Now, you have a situation where you clearly feel that your vehicle is worth more than you owe or represents a better solution for you than trying to buy another after bankruptcy. Only you can decide. If yiou are happy with the car and the loan and can get the trustee to approve it, then go ahead and sign the reaffirmation agreement. I reaffirmed mine and refinanced it recently. I still have one remaining issue with the original loan company but that's another story.

Do what is right for you and your family first ... then worry about the loan company after. Such is life ....