My car was repo’d about 2 weeks ago. I lost my job about 6-7 weeks ago. I was told that by filing chapter 7 bankruptcy, I would be able to “wipe out” or be protected from having to pay the difference that is owed on the car after it goes to auction. From my understanding, Chap. 7, I would be able to leave out certain items, like my credit cards that have all been paid on time for 7+ years. Any advice or help?? I live in Michigan, if that matters for bankruptcy laws.
Originally posted 2009-08-20 02:52:16.
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I’m far from a bankruptcy attorney, but since no one else answered you I thought I would just say that is how I understood chapter 7 to be. I am positive they will wipe out the difference between what you owe and what they get. And am ALMOST positive you can exclude certain items. Though I don’t know why you would want to keep the credit cards. The interest will shoot through the roof when they find out about the bankruptcy…they may even decide to just cancel the card. Which will harm your credit score. Better to start fresh in my opinion. You can get a “secured” credit card that you put money onto and then spend. This helps you with the convieniance of a credit card without high interest and it will help you get a secured card in the future when they report that you are in good standing.
Wrong answer on the first post. You need to contact a local bankruptcy attorney to find out if you qualify for a chapter 7 filing. No…you cannot pick and chose what debts you include in a bankruptcy filing. With the new laws passed in Oct 2005, you have to include all debts, you have to take a mandatory credit counseling course, both before and after your filing, an attorney will tell you what is needed. A chapter 7 filing, yes, will cease the collections or garnishment of the balance due on the repo. You can gain more information at the US Bankruptcy official website @ Excellent information on how bk proceedings work. Make sure bankruptcy is your absolute last resort. It will stay on your credit report for 10 years, the debts for 7 years. It’s very hard to re-establish credit and you have to work hard and use a lot of discipline after to re gain the credit you once had. It can effect employment as well as some companies do check credit now for a new job, as well as having a hard time renting or leasing a new place to live. My best advice is to contact 2 or 3 bk attorney’s in your area, not all charge the same amount. You’l have to pay for a retainer, a chapter 7 can run from 500.00 to 1800.00 to file, a chapter 13 is alot more as there is more work to it. Make sure they see you free the first consultation and then they will require you to bring in income information, etc, and be able to at that point tell you what you qualify for. Once you have seen the 2 or 3, pick the one that you are the most comfortable with, not just the cheapest one…one that you think can handle your case correctly. Read up on the website that i provide, it’ll give you some great insight. Good Luck!