topic Re: Defeated - Any Help, Ideas or Suggestions? in Bankruptcy

Defeated - Any Help, Ideas or Suggestions?

Total80sKid — Mon, 08 Apr 2019 22:59:47 GMT

Hey guys!

Long time, no talk!

I want to start out by saying I already know that I got myself in this situation by my own actions. I am back here looking for any ideas or suggestions as to what I should do next, not a scolding or 'I should have done this or that.' I take 100% responsibility for my actions and know that I am not a good candidate for credit at this ppoint, nor am I wanting any for a very long time.

Maybe by the time I hit 50 I will have learned.

I could post a super long post, but my ADD won't allow me and I don't want anyone here to have to read a novel. Hopefully I will post my issues here with a somewhat easy way to read/follow. I am desperate for advice as to what I should do from right now forward. Here are my main issues that I really need some advice about. It all mainly pertains to my PenFed accounts:

- I had to default on 99% of my credit cards after maxing them out.

- I am in debt roughly $70,000.

- My current income is roughly $900 a month - On disability

- The only things I am paying on are all of my PenFed accounts.

- Power Cash Card: $7,500 - Monthly payment is around $155+

- Promise Card: $10,500 - Monthly payment is around $220+

- PLOC: $1,000 - Montly payment is around: $25

- Used Auto Loan: $7,100 - Monthly payment is around $205 - Still owed: $3,828 - 1.5yrs of the 3yr loan have been paid

I am wondering what to do. With my current income, I am paying roughly $600 to PenFed. I can't keep my credit cards from going over every month, because as soon as I pay the min. the interest get's added in and I'm over. Wash and repeat.

I need the car and can afford that payment. I am halfway through a 3yr used auto loan with it. I owe roughly $3,800 on it.

Now I am assuming most will say I should file for bankruptcy. Not sure, as I know nothing about it.

I have been trying to do my own research and can't get clear answers aside from me needing to contact a lawyer. Again, a $$ issue, but if I need to file bankruptcy, I will come up with the roughly $300? fee it costs to do so.

Now my main worry out of everything here is my car. I know you can't pick and choose what you file bankruptcy on and I am not sure what PenFed's rules are regarding defaulting on certain loans, yet still paying on time the auto loan.

If i need to file for bankruptcy, can I keep my car? Even if all of my other PenFed accounts are included for the bankruptcy?

I live in California, by the way, as I know every state has their own laws.

I am so sorry to anyone reading this who took interest in my quick rise from no credit and a score around 500 back in May of 2017, to scores just under 800 and over $70k in credit by July/August of 2017. I feel horrible. Life happened. The loss of a loved one, etc, but again, no excuses.

Also, Discover has served me, over a month ago and there was no date to respond by or anything, not sure what to do about that. I owe them around $11k.

If anyone can offer tips or suggestions as to what I should do, I would be beyond grateful. It took me months to come on here and admit my issues, but I am a human being and we all make mistakes.

Thank you again to everyone who followed my journey and to anyone who can offer friendly advice.

Tony

Re: Defeated - Any Help, Ideas or Suggestions?

Shooting-For-800 — Mon, 08 Apr 2019 23:48:17 GMT

Seems like Ch 7 would be a good option.

Most states allow you to keep either a house or low valued car or “wild card” or a combo of the three.

Ch 7 works for honest people with low income, few assets, and a lot of honesty.

Many have been there. It exists for a reason.

Most that have declared wish they had not waited so long.

I would stop paying any unsecured debt and start saving CASH.

With your income a debt, I see no other real options.

GL!

Re: Defeated - Any Help, Ideas or Suggestions?

FireMedic1 — Mon, 08 Apr 2019 23:57:52 GMT

Welcome back. Sorry this happened. Look at it this way. If you paid the minimuns with your income and the total debt you have. It would take 20 years or more to pay it all back. You can keep your car since its an afforable payment. Dont know how that CU works on reaffirmations. But I guess you know the answer. Look into BK lawyers in your area and get advice from them on the best path to go from here. You've seen how many have recovered after BK. Its a tough choice. Only you know what will be best thing to do to get out of this situation. Best of Luck!

Re: Defeated - Any Help, Ideas or Suggestions?

Anonymous — Tue, 09 Apr 2019 01:45:23 GMT

Your situation is a little more complicated than that because you have credit card debt and a car loan with a credit union. Normally in chapter 7 you can get rid of all the credit card debt and kept the car and make payments. (This is an oversimplification but you get the general point).

But since you bank is a credit union they could invoke the cross collateralization clause. You need a bankruptcy lawyer. (Preferably one familiar with credit unions). Almost every bankruptcy lawyer will give you a free consultation. It will last an about hour. Take notes. If you decide to file you will stop paying your bills anyway, 1-2 months of not paying your bills and you should have enough to cover lawyer cost and court fees.

Read this explanation from Nolo. They give an example that is exactly like your situation. It will all become clear after reading this.

https://www.nolo.com/legal-encyclopedia/credit-union-cross-collateralization-bankruptcy.html

Re: Defeated - Any Help, Ideas or Suggestions?

Total80sKid — Tue, 09 Apr 2019 02:01:07 GMT

Thank you for that info and link, @Morpho and to the other posters above.

Will get to reading that link in a bit.

This is what I was worried about. Having the car loan with a bunch of other loans from the same credit union. *sigh*.

If that's the case, I will have to just keep paying the minimums on everything PenFed for the next year and a half until the car is paid off. I will have no other choice. I can't lose my car.

Hopefully it can all be worked out.

Re: Defeated - Any Help, Ideas or Suggestions?

Total80sKid — Tue, 09 Apr 2019 02:18:05 GMT

Oh, geez.

Just read the article.

If that clause is in my auto loan contract, they can take it even if paid off. Wow.

Lawyers scare me. Have no idea who to trust, can't rely on yelp and their false negative/positive reviews, etc.

Wouldn't even know where to start to find one that is trustworthy. This is another reason I have put this off for over 6 months. With my anxiety issues, I deal with stress poorly. The stressor will come into my life and I can somehow just put it out of my mind and not deal with it. I hate that I can do that. This does need to be dealt with, but it all just seems so overwhelming to me.

Re: Defeated - Any Help, Ideas or Suggestions?

Shooting-For-800 — Tue, 09 Apr 2019 03:10:48 GMT

You might be better off selling the car and buying a $1000 car to get you by before you file.

Once that car is sold, it is done.

Just a thought.

Your stress level can be completely different in less than a year.

Re: Defeated - Any Help, Ideas or Suggestions?

Total80sKid — Tue, 09 Apr 2019 05:11:05 GMT

^ I can't sell the car as I don't own it, yet. I can't give up my car. I earned my 1.49% rate, have paid on time and plan on doing so, and if it means paying off PenFed for 20yrs, then so be it.

I can't lose my car and I am not thinking of selling it. Never had a car newer than a '91 and found this '08 used.

If that clause is in there is it 100% certain they will take it and sell it? I know this is why I need a lawyer, but if I am just gonna end up losing the car if I file, I will not be filing.

Re: Defeated - Any Help, Ideas or Suggestions?

Anonymous — Tue, 09 Apr 2019 05:35:25 GMT

refinance it with a subprime lender and then deal with the high interest rate? Pay it off with a high interest credit card cash advance? Just a few ideas.

Re: Defeated - Any Help, Ideas or Suggestions?

Anonymous — Tue, 09 Apr 2019 05:39:05 GMT

OP has 70K debt with $900 a month disability income. Never going to catch up unless a well paying job comes along. California has many free legal clinics that can handle a relatively simple BK with essentially no assets involved. List all debts in your petition with a request to reaffirm the car even if you're not reaffirming. It's a crap-shoot to figure out if the CU will want to repo or allow him to continue paying. My guess is that the car is probably not worth enough to cover the outstanding balance. After filing he could save enough to buy a transportation worthy car for 1000 or 1200 before the discharge day. OP needs a closure badly in my opinion. Continuing with payments on some obligation in order to keep the car is not the answer. The defaulted cc accounts will file lawsuit sooner or later and will complicate everything.

Re: Defeated - Any Help, Ideas or Suggestions?

Brian_Earl_Spilner — Tue, 09 Apr 2019 06:16:29 GMT

You need to follow up on that discover card. In my jurisdiction, in California, you get 30 days to answer before a default judgement is entered. While they may not be able to take your disability, you'll have a judgement that can be renewed over and over until it's paid.

Re: Defeated - Any Help, Ideas or Suggestions?

Shooting-For-800 — Tue, 09 Apr 2019 10:57:19 GMT

@Total80sKid wrote:
^ I can't sell the car as I don't own it, yet. I can't give up my car. I earned my 1.49% rate, have paid on time and plan on doing so, and if it means paying off PenFed for 20yrs, then so be it.

I can't lose my car and I am not thinking of selling it. Never had a car newer than a '91 and found this '08 used.

If that clause is in there is it 100% certain they will take it and sell it? I know this is why I need a lawyer, but if I am just gonna end up losing the car if I file, I will not be filing.

You don’t have to own a car to sell it.

You have to take emotions out of it.

Re: Defeated - Any Help, Ideas or Suggestions?

Total80sKid — Tue, 09 Apr 2019 22:37:26 GMT

^ It's not really emotions, I just have no way to get anywhere and it's a must that I keep this car.

Whatever that entails is what I will do.

I greatly appreciate your suggestions. It's all so overwhelming.

I have my auto loan contract, I guess I can try to skim to see if that clause exists.

Re: Defeated - Any Help, Ideas or Suggestions?

Total80sKid — Tue, 09 Apr 2019 23:04:00 GMT

I just read my auto loan agreement and in the DEFAULT section, it says this. Hope this is legible:

Is this that Cross-Collateralization clause? I'm still unsure if this means 100% it will be taken away if I default on other loans made to me by them and declare bankruptcy. This is why I am not sure what to do.

Logically, I need to file for bankruptcy, but I also need to keep the car. It isn't a luxury car and when I first looked into buying a used car I didn't want to spend more than $2k, I found nothing decent. Then $3k, $4k, etc. It took $7k to find something where everything works.

It's an 2008 Chevy Malibu, just shy of 100,000 miles.

I'd assume all of this should play a factor in it being taken, etc, but I just have no idea.

Re: Defeated - Any Help, Ideas or Suggestions?

Anonymous — Wed, 10 Apr 2019 00:18:50 GMT

It would cost them more to repo and auction off than the balance you owe. After all it's a 10 years old car with high mileage. You can always call them and ask what they would do. Tell them you want to file for bankruptcy but would like to continue making payments on the car until it's paid for. See what they say. They can't harm you as long as your current with everything. I did that with Wells Fargo and they allowed me to continue making payments. (I'm about 8 months post discharge.)

Re: Defeated - Any Help, Ideas or Suggestions?

Total80sKid — Wed, 10 Apr 2019 01:08:40 GMT

^ Thank you for that.

I'm just trying to cling to a little bit of hope regarding this whole unfortunate situation.

I could call and ask, but it would definitely set off alarms with them, so I'd have to call from a friends phone as they know who you are by your phone #, at least I believe that's part of the verifying info, and just see what they say.

Re: Defeated - Any Help, Ideas or Suggestions?

MyDataMyChoice — Wed, 10 Apr 2019 04:01:07 GMT

Penfed will not REPO your car if you are paying your loan.... even during a CH7... and after... pay your loan and you should be fine. You'll just never get the title to the vehile.... but the money you will be saving... you can rebuild your credit and save for a new car.

Re: Defeated - Any Help, Ideas or Suggestions?

Total80sKid — Wed, 10 Apr 2019 07:38:45 GMT

Buying another car with credit or any extra $$ is not in my future.

I have other bills I must pay: rent, phone, internet, food, etc. I’m barely scraping by, so once I can stop paying these credit cards, I’ll actually have enough to eat decently.

No $$ is left to be saved.

So it just seems like it’s hurdle after hurdle. If they don’t take the car, I’ll never get the title? Then what’s the point? I need to KEEP the car.

Does the title in my name only allow me to sell it? Nothing more? I can just drive it for years and years if I pay it and eventually pay it off, I just couldn’t sell it?

Re: Defeated - Any Help, Ideas or Suggestions?

Anonymous — Wed, 10 Apr 2019 18:36:30 GMT

Stop paying your credit cards immediatly. Please get a BK lawyer, you will most likely keep your car too please dont worry yourself sick over it.

The money you use not paying your cards, put away for the lawyer. I was in your position, we all were and that is why we're on this forum. I didn't owe as much as you, but I couldn't afford my cc's anymore.. I said if I have no cc debt, I can "live" paying my rent, phone, car, gas, etc. I can tell you it's the best thing I have done.

I re-affirmed my car, and now they have it as closed on my credit report,but I am still making payments. Like you, I need my car.

Re: Defeated - Any Help, Ideas or Suggestions?

MyDataMyChoice — Thu, 11 Apr 2019 01:28:18 GMT

@Total80sKid wrote:
Buying another car with credit or any extra $$ is not in my future.

I have other bills I must pay: rent, phone, internet, food, etc. I’m barely scraping by, so once I can stop paying these credit cards, I’ll actually have enough to eat decently.

No $$ is left to be saved.

So it just seems like it’s hurdle after hurdle. If they don’t take the car, I’ll never get the title? Then what’s the point? I need to KEEP the car.

Does the title in my name only allow me to sell it? Nothing more? I can just drive it for years and years if I pay it and eventually pay it off, I just couldn’t sell it?

You can keep the car and pay on it... IF they cross collatorize they wont give you the title... (that doesnt prevent you from keeping the car or registering/insuring it) just cant sell the car or trade it in down the road. I doubt they will repo for such a small balance... not worth their time.