Bankruptcy Reaffirmation Question

[Anonymous]

So I'm in the process of filing Chapter 7 Bankruptcy. I already turned in all of my paperwork but I've been doing a lot of thinking. I'm including about $25,000 worth of debt in my bankruptcy, which includes some personal loans and credit cards. I wasn't planning on including my auto loan but I might change my mind. In January of 2017, I purchased a new car. I financed almost $52,000, and that included some negative equity from my old car loan that I traded it. My salary is about $52,000, before taxes. I really do like the car but don't enjoy paying the $807/month car payment. I absolutely need a car to get to and from and would need another car the day of my discharge if I decided to include my car/loan in my bankruptcy. 

Do you think a trustee would approve my reaffirmation? Also, if I don't reaffirm and continue to make payments on the car what happens? If I let the car go, am I responsible for continuing to pay for it?

Any help is greatly appreciated. 

[Anonymous]

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@Anonymous wrote:

So I'm in the process of filing Chapter 7 Bankruptcy. I already turned in all of my paperwork but I've been doing a lot of thinking. I'm including about $25,000 worth of debt in my bankruptcy, which includes some personal loans and credit cards. I wasn't planning on including my auto loan but I might change my mind. In January of 2017, I purchased a new car. I financed almost $52,000, and that included some negative equity from my old car loan that I traded it. My salary is about $52,000, before taxes. I really do like the car but don't enjoy paying the $807/month car payment. I absolutely need a car to get to and from and would need another car the day of my discharge if I decided to include my car/loan in my bankruptcy. 

Do you think a trustee would approve my reaffirmation? Also, if I don't reaffirm and continue to make payments on the car what happens? If I let the car go, am I responsible for continuing to pay for it?

Any help is greatly appreciated. 

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You can in most cases keep making the payments and keep the car without reaffirming. (and be able to bail on it should you need to.) It depends on your bank.

BUT . . . . 

Once more, I must suggest you get rid of it. Your payment is nuts IMO.

Buy a beater for cash for 6 months and get your rebuild going. At that time, you could finance a nice few year old Camaro for half the price.

I like nice cars, too. I get it. My current and last car were both dream cars that were out of my price range new that I bought a few years old and gently used for a fraction of the price and within my budget. I can't recommend this enough.

[StartingOver10]

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@Anonymous wrote:

So I'm in the process of filing Chapter 7 Bankruptcy. I already turned in all of my paperwork but I've been doing a lot of thinking. I'm including about $25,000 worth of debt in my bankruptcy, which includes some personal loans and credit cards. I wasn't planning on including my auto loan but I might change my mind. In January of 2017, I purchased a new car. I financed almost $52,000, and that included some negative equity from my old car loan that I traded it. My salary is about $52,000, before taxes. I really do like the car but don't enjoy paying the $807/month car payment. I absolutely need a car to get to and from and would need another car the day of my discharge if I decided to include my car/loan in my bankruptcy. 

Do you think a trustee would approve my reaffirmation? Also, if I don't reaffirm and continue to make payments on the car what happens? If I let the car go, am I responsible for continuing to pay for it?

Any help is greatly appreciated. 

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Please add the car (asset) and the car loan (debt) to your bk.  For one thing, it is the smart thing to do.  For another,  you are required to list each and every asset and debt.  Even if it is something from a long time ago that you may have forgotten about - add it. 

You can either reaffirm your car loan (not recommended) or just continue to make the payments timely without reaffirmation. If you don't reaffirm your car payment, then you can turn it in without being responsible for further payments.  You can pay for a few months until you get back on your feet and can purchase something else for a lower payment and when you do that you can surrender your vehicle without penalty if you have NOT reaffirmed your loan.  If you do choose to reaffirm you are responsible for the debt. That's why most of us say to do a "ride through" without a reaffirmation.  http://www.nolo.com/legal-encyclopedia/reaffirming-car-loan-chapter-7-bankruptcy.html

That payment is way too high for your income.  Since you are filing anyway, include all your debt so you get a clean start. Most especially, dump that vehicle and its payment. It will really hinder you from recovering financially from your bk.