Posted by: admin in chapter 13 bankruptcy help on
xquuzme asked:
If we DO get to keep the vehicle, A 2002 Chevy Avalanche, we actually want to trade it in for something more fuel-efficient (it costs us $120. to fill up!). Can we do this? Should we do this before we file, so that we may be able to keep the same interest rate, or if we do this before we file, will the new loan/car have to be included in the bankruptcy? How does this work?
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If we DO get to keep the vehicle, A 2002 Chevy Avalanche, we actually want to trade it in for something more fuel-efficient (it costs us $120. to fill up!). Can we do this? Should we do this before we file, so that we may be able to keep the same interest rate, or if we do this before we file, will the new loan/car have to be included in the bankruptcy? How does this work?
You should trade it in before you file—because then you can show that you were trying anything and everything you could do to avoid bankruptcy–even trading in your beloved, gorgeous Avalanche to get a smaller vehicle!
HOPEFULLY, you have equity in the Avalanche and you’re NOT in an “upside down” loan (where you owe more than it’s worth).
Good luck.
When you file chapter 13, you are set up in a repayment plan. Yes, you get to keep the vehicle and it will be part of the payment plan. You will probably save on the interest.
The court might not look too fondly on you trading in for a new vehicle justs before you file bankruptcy. But all your debts will be included in the bankruptcy. You don’t get to chose what will be included and what you will pay.
You raise several issues here, some of which answers may conflict, so let’s handle these one at a time.
1) You can keep the vehicle if you a) reaffirm the debt, b) are able to maintain the payments, and c) the court agrees
2) If you trade-in the vehicle, you will probably not be able to get financing for a new vehicle, since you are in Chapter 13.
3) If your credit at present will allow you to refinance, then do this before you file.
4) Your interest rate will be based on your credit and capacity today, so it likely will not be the same as before.
5) The new loan would be part of your Chapter 13 filing, but again, see #1
For information on how all of this works, speak to your BK attorney. I don’t know about your personal situation, but from experience, I can tell you that BK is rarely your best option. Speak to other professionals in the financial services arena in order to ensure that you are making the right decision for your lives.
A bankruptcy will follow you around for ten years (or longer, in some cases). Some debts cannot be discharged through bankruptcy (tax liens w/in 3 years, student loans, certain judgments). Again, get professional advice from more than one source.
** Please note, that nothing contained herein is construed to offer legal, accounting, or tax advice. These are simply lay opinions, and no warranty, representation, or guarantee attaches to these comments. For tax, accounting, or legal advice, please contact a licensed professional in your area. **
yes, you can keep
If you go bankrupt, file your bankruptcy under Chapter 13. Chapter 13 permits an US resident to reorganize and restructure their finances. It allows you start afresh and get your finances back on the track. The bankruptcy court will supervise and authorize the entire process of overhauling your financial situation.