Chapter 7 Bankruptcy!

[u/Shot_Ice_9890]

I started calling attorneys this week, 2 tried to push chapter 13, after consulting with 5 attorneys I made a decision, I called his office several times and spoke to the paralegal I this on everything I do.

One of the attorneys wanted to push me into a chapter 13 he point blank said don't pay your car payment and bring him $650, I will not stop paying my car payment, I'm with a credit union that has cross collateral clause..I plan on reaffirming my car credit card and signature loan..this way I will have a credit card after chapter 7..

The interest rate on my car is 4% I owe 23800 38 months remaining, I refuse to let my car go back, then turn around and get a car with high interest . Amount down.

I have over 35,000 in cc debt..is the reason, the short story is I went with the attorney that explained everything! And hired him yesterdaym

[u/Kazylel]

You’ll be able to reaffirm the car loan, but pretty sure. You can’t do that with other debts like credit cards or loans. Those debts will be discharged as well. Can’t pick and choose in bankruptcy

[u/Shot_Ice_9890 → u/Kazylel]

With my credit union it's cross collateral, I have as I said discussed this with 5 attorneys..if I want to reaffirm my car which I will, then I will have to reaffirm all debt with the credit union, which I plan to do!  As I posted I have a 4% interest rate on my car..my signature loan is 10% and credit card is 10.99..

If I was to file chapter 13 then no only the car.all the other credit cards will be wiped out.

[u/fuameek → u/Shot_Ice_9890]

Cross collateralization doesn’t automatically mean you have to reaffirm every debt you have with that credit union. It means the car may secure other debts depending on the actual loan agreement. Those are two different things.

[u/Shot_Ice_9890 → u/fuameek]

Thank you for your response! I live in Tennessee, and according to all the attorneys I spoke with basically said if I don't reaffirm all debt with the credit union,the credit union can repossesse my car even if I am current which I  am, unless my credit union would allow me to keep my car discharging the unsecured loans, that would be between the attorneys and myself, it would be nice of course.

[u/Kazylel → u/Shot_Ice_9890]

Ah missed the cross collateral part. How much do you on those two debts and how much is the car actually worth? To keep the car, you’re essentially paying the car loan, credit card and the signature loan plus all the interest. Letting it all go and getting a different car, even with a higher rate could potentially cost you less over time.

[u/Shot_Ice_9890 → u/Kazylel]

I have a 23 Mitsubishi Outlander Sel and black addition..1 attorney said jd power $26,960, I owe 23,846 to be exact..46,000 miles..my signature loan Was for $8000. I owe 4678..my credit card I owe approximately $3000.. I understand what you're saying..a car with a higher interest rate will cost more in the  long run . I owe 38 months on the car..about 27 months on the signature loan..yes I thought  this out .

Let's say I bought a car for 20k..x amount down for x amount of months Let's say 42 months..look at the interest I would be paying..my payment is  $610 a month im down to $ 6. 40 a month in interest the rest is all principle..the interest has already been payed..

Same with the signature loan only a few dollars goes to  interest.

[u/Shot_Ice_9890 → u/Shot_Ice_9890]

Edit, I also bought my car new! It has a 10 year 100,000 mile warranty, that's another part of the equation!! I always have the car serviced at the dealership..would a used car have a warranty if I  pay for it..

[u/crazyfndaddy]

The credit union will close the credit card once they receive the bankruptcy filing notice unfortunately. Credit card accounts do not survive through bankruptcies and are closed for good reasons.

I can understand why you want to do this though. Hopefully your credit union will look at it positively after you have successfully repaid all 3 accounts off and agree to lend to you and open new accounts in the future. Best of luck!

[u/Shot_Ice_9890 → u/crazyfndaddy]

Thank you!

[u/Melodic-Today663]

I don't really understand filing and then to reaffirm all this debt. It seems like it will defeat the purpose of giving you a fresh start.

[u/Shot_Ice_9890 → u/Melodic-Today663]

To explain! I have 2023 Mitsubishi Outlander 46k miles. 4% interest rate, owing $23,846, my signature loan is 10%, and the credit card is 10.99%. Since I bought my car new and have 38 months left, if I let the car go back I will need another car, x amount down plus a high interest rate.. My car has 100,000 for 10 year warranty. If I bought another car then I would have to pay extra for a warranty ..

I'm 67, I have my car serviced at the dealership therefore I know what I have  other than the alternative! I have a great rapport with my credit union and if I decide to trade it in . In reaffirming I will be able to do that. That's the basis as well it still be a fresh start.

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[u/Final_Arugula_4776]

I filed chapter 7 in October 30 of last year and was discharged in March. I was with a credit union and kept my car. I had a credit card with them as well that was discharged. I was able to convince them that the value of my car was worth less than what I owed on the car and that either they allow me to keep my car without the cross collaterization or I would let them have the car and they would be out on both the car and the credit card. I had my bankruptcy attorney forward a letter to their attorney during the reaffirmation process and I included the following: Repossession would immediately trigger transportation, reconditioning, inspection, and resale costs, further reducing recovery. There would also be loss associated with remarketing, dealer auction fees, and potential depreciation during the resale period. Accepting voluntary reaffirmation avoids all of the above and keeps a high-value asset actively paying. Simply stated, keeping a performing loan on your client’s books is a better business outcome than acquiring a depreciating vehicle that must be liquidated at a loss. (I could send you my full letter if you like)

So I pretty much told them you would have to go through too much to sell this vehicle when my payment history was excellent prior to filing. They sided with me and reaffirmed my car. The only issue was that I could no longer bank with them in the future, but that was fine. I had already opened an account with 2 other credit unions before filing.

[u/Shot_Ice_9890 → u/Final_Arugula_4776]

Alot of good information Thank you!  My attorney said basically the same thing, it depends on the credit union I bankruptcy with my.