bankruptcy question???

[chrissy92972]

Hi! I did read the credit boards and asked a few questions, but I am hoping someone here has the answer I need.

We contacted a lawyer last week about filing Ch 7 but did not meet with him yet.

My question is about my car lease. I have 5 more payments on it, what do I do about getting another car if we file Ch 7. I need a car that seats 6 and whether I get a new one by lease or used one by loan I intend to pay for a car and not includeit in bankruptcy...

Also we have two mortgages and want to stay in the house and make payments can we get rid of the 2nd mortgage along with the credit cards in ch 7 and pay on the 1st mortgage and keep the house.

thanks!
chrissy

 

[*pixie*dust*]

Your income and assets will be the deciding factor if you can file Chapter 7. You may actually be forced into Chapter 13, a repayment plan, if your income is too high or you have too many assets.
If you want to keep the house you will have to pay both the first and second mortgage. You can't walk away from one and keep your home. The attorney will likely tell you to stop paying all bills that you plan to walk away from. You will also be advised not to make any purchases except normal living expenses as they can cause issues with the bankruptcy.

You may have to go with an old used car or go with only one car for a while.

 

[chrissy92972]

Thanks for the information.....since we need two cars due to my husbands commute and my son's medical issues, should I try and get another car now before we file? I plan on paying for a car even if we file not including it. We have no savins, maxed out credit cards, and meidcal bills galore. We tried CCCS and they told us to file BK.

Thanks

 

[Disney_Freak56]

Are all your debts in your name or your husband's name? If they are only in your name or your husband's, then that person can file bankruptcy and not the other. At least that's how it was in the past. Not sure if that is still the case today though.

Also I believe that a bankruuptcy stays on your credit report for 10 years. I believe it used to be 7, but the last I heard it was 10.

Please don't take my comments the wrong way because I am not trying to judge you, just want you to be a little informed.

I'm sorry that things have gotten so bad that you have to even consider filing bankruptcy. I hope things do get better for you and your family financially.

 

[chrissy92972]

debts are in both names.....I need to know what to do about the car that is my main issue. Still waiting on lawyer paper work he maile dit on Wednesday, and it is coming a whole two miles. Love snail mail.

chrissy

 

[mgroshans]

throwing to help you. Good luck and hope it works out for you and your family.

 

[Mellie2162]

http://www.bkforum.com

 

[Darcy03231]

At this point the best thing to do would be to pay cash for an older model car in good condition. It doesn't sound like you have any credit available to be able to purchase a car on credit.

 

[DisMN]

Good luck OP, I feel your pain. From our experience consumer credit counselling ONLY suggested bankruptcy to us. We tried them 3 times over the years and bankruptcy was their only solution for some reason.
We have a huge aversion to it so we put it off for many years, in the mean time just tried to maintain and not go backwards.
We discovered completely by accident something called debt management and are in the middle of that process. Debt management is paying back all debts and isn't as nearly as complicated or as punishing as bankruptcy. You might want to check into that. Not the settlement type but the management type.

Best of luck to you!

Edited to add: Sorry, I didn't really touch on the car subject. I'm honestly not sure what I'd do in your shoes...especially since you are in a leasing situation.

 

[RubyTuesday]

My family has a used car business. During the last year it has been impossible for us to get financing for people who have bankruptcies on their credit report. It is especially hard when the bankruptcy has not yet been discharged. There are some places that will do it, however, you are looking at interest rates of 18% and up.

I would talk to your lawyer and see if getting a car now would be better or if this is even allowed since you are planning on filing.

 

[bettymae1121]

I think if you do a chap. 7, anything you buy on credit 90 days before hand can't be included. So if you go and get a car loan before you file, they won't include the car loan in the bankruptcy. The idea was to keep people from charging tons of stuff only to file BK a week later. So this also means that anything you charged (even if it was needed things like food and utility bills) can't be included either, and you'll be set up on a payment plan rather than having it wiped out in a Ch. 7. But for sure speak to your lawyer about it, BK is very tricky and you don't want to do anything that will screw it up.

 

[mamaLori05]

I really don't know that much about bankruptcy, so definately double check everything with your lawyer. From what I have heard though, once you file, you will not be able to get any kind of financing. No credit cards, car loans (which I would guess would include leases?), or any kind of credit. You will be on a cash only basis. I'm also guessing that since it sounds like you are maxed out everywhere, that even if you go in now to try and get a loan or lease a car you will be denied based on your available credit and credit score (which I am assuming is also low..please forgive me if my assumptions are wrong.) Do you have any cash that you could use to purchase a used car? I am affraid this might be your only option. Check craigslist and the local paper and I'm sure you can find a used one for fairly cheap ($500-$1000). It won't be anything fancy, but at least you would have a second car. So sorry this is happening to you!! Sending some pixie dust your way!!

 

[threecrazykids]

Yes, it depends on your state but the "rules" of filing are much more stringent than they used to be. We discussed filing with a lawyer and he told us the same thing the prior poster said...you can't file just on the second mortgage. You either lose the house or keep it...you can't just rid yourself of the second mortgage.

Also, like another poster said...do NOT charge anything because anything you've charged recently they scrutinize and WILL take back if they can for the value.

Best of luck to you.

 

[tinkerbelletreasure]

I filed bankruptcy back in 2005 right before the laws changed. So some of my experience may be out of date, btu here goes...no you can not keep the house and get out of the second mortgage. I handed my house back as part of my bankruptcy because I was upside down on the mortagage...and many people are rigth now becaus eof the recession. I did not want to risk a foreclosure on top of a bankruptcy.
It was tougher, but not impossible fo rme to get a car loan. I have had 2 since the bankruptcy. I had to have a co signer for the first one. Both were at very high interest rates though. My suggestion would be to buy a good used minivan. Around here, you can pick one up for around $1500. After about 18 months I started getting credit card offers again. 5 years later, it barely affects me, but then again, when we bought our house, it was all on my husband's credit, and I only keep a credit card to build up my credit again by paying off in full.

 

[chrissy92972]

Thank you everyone. I did speak to my lawyer today briefly on the phone and specifically asked about a car, he said we can get one before we file. I am still waiting on paperwork from him to fill out and gather information before we meet with him and file. I am assuming ch 7 but who knows...I am still confused about ch 13. I know we would pay back some of the debt over 3 to 5 years, but what about the mortgage? If we owed $90000 total for the next 23 years, we would still owe that right?

I did look on the cedit boards etc, but no one wants to answer me, thank you for your help everyone.

For everyone who has healthy children say a prayer because this is a nightmare I wouldn't wish on my worst enemy.

Chrissy

 

[*pixie*dust*]

If you want to keep your home you would have to pay both 1st and 2nd as agreed whether it is Chapter 7 or Chapter 13.
The unsecured debt and anything you are going to surrender, in a Chapter 13, would require that you pay a portion of those back over 3 to 5 years and then the rest would be declared uncollectable.

 

[CowboyCO]

Yes, it depends on your state but the "rules" of filing are much more stringent than they used to be. We discussed filing with a lawyer and he told us the same thing the prior poster said...you can't file just on the second mortgage. You either lose the house or keep it...you can't just rid yourself of the second mortgage.

Also, like another poster said...do NOT charge anything because anything you've charged recently they scrutinize and WILL take back if they can for the value.

Best of luck to you.

Bankruptcy is a federal filing. Rules are the same everywhere.

 

[Inigo]

Bankruptcy is a federal filing. Rules are the same everywhere.

The "rules" are the same everywhere, but each state was allowed to set their own exemption amounts, so it really does depend upon where the filer lives. Some states let you keep more assets than other states.

http://www.thebankruptcysite.org/bankruptcy-exemptions
to find out the exemptions for each state

 

[Jey12]

First I am sorry to hear of your child's medical issues and wish the best in the future for your family!

I recently had a friend file and here's what I've learned from their situation. It's a federal filing, but some states to have their own limits on wether you qualify for a chap. 7 or not. I believe the average income cap is around 65k a year gross. If you make more than this and cannot show you are severly upside down on everything you need to go to a chap. 13. Your car is a lease so I am not sure how that will work once you reach the end of your lease. If you were buying it outright with a regular loan you could reaffirm the loan for around $75 I believe. Since you will be at the end of a lease you would have to either pay off the remaining balance or get a loan for that amount. If you file you are not going to be able to get a loan more than likely. I would imagine you are going to have to return the vehicle. Even if you file a chapt. 13 I am not sure you would be able to keep the car, because the end of the lease problems would still be there. As far as your home you will need to reaffirm both mortages. You cannot pick and choose with that, it has to be both of them. Some mortage companies require you to pay the $75 for each mortage to reaffirm, some do not require you to reaffirm the loan and you would just keep paying on them per your regular schedule. Any other unsecured dept would be discharged as part of your bankruptcy. I went with my friend for her court date and they will go through your bank statements and finances for many months and ask any questions they want regarding them. You will not be able to get another car and file so soon after. Unless you plan on paying cash and I would assume this isn't an option. I'm sorry it seems that you are going to lose a vehicle that you need for your child. You might reach out to some community programs that donate cars for families that need them for medically fragile children. I would do that after you file though or else it would be an asset. I know in our area they have cars for Christmas that runs all year long for these types of situations. Problem is you won't be promised a vehicle and would need to have plans for an option B.

I wish you and your family the best.

 

[chrissy92972]

Thank you everyone....I really appreciate your kindness, advice, and stories. This is so hard, I just cannot believe that we have to do this.

chrissy