QUESTION
Does a previous car loan before you file for bankruptcy still effect credit if the car is turned in after you file?
Asked on Mar 15th, 2012 on Bankruptcy - Michigan
More details to this question:
Live in Maryland and thinking of starting a new car loan and turning my old loan in for repossession of the vehicle . Is that a better way to establish credit or keep the same loan?
3 ANSWERS
Domestic Relations Attorney serving Huntsville, AL
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Ferguson & Ferguson
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Your old car loan will probably be reported as a repossession. That coupled with a bankruptcy will certainly hurt your credit. Paying any car loan after a chapter 7 will certainly help reestablish your credit. Therefore you need to determine which vehicle in the long run is better for you.
Answered on Mar 17th, 2012 at 10:21 PM
Bankruptcy Attorney serving Hayward, CA
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Carballo Law Offices
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Having a repossession is another black mark in your credit but will probably not make much or any difference given that your credit is going to be affected negatively by the bankruptcy and maybe, more importantly perhaps, by other debt that you are not paying. Keeping the vehicle on which you owe more than what is worth or that you can not afford is an expensive way to try to improve your credit with little or probably no benefit anyway.
Answered on Mar 16th, 2012 at 2:21 PM
It may be a better thing to do to have a better car to reaffirm on after you file Chapter 7. Keeping the old car or turning it in after you file Chapter 7 will most likely not matter regarding your credit report one way or the other.
Answered on Mar 16th, 2012 at 1:55 PM