QUESTION
How will a voluntary repossession affect my bankruptcy?
Asked on May 17th, 2012 on Bankruptcy - Kansas
More details to this question:
MY fiance lost his job at the same time I went on maternity leave for three months. We were unable to catch up with our car payments when I returned to work so I voluntarily turned the vehicle back into Ford. I am now being sued by them for $10,000+. Is bankruptcy the best option to avoid paying them this fee? Also, I am a homeowner but my parents co-signed for me. How will this affect that situation?
16 ANSWERS
Immigration Attorney serving Arlington, TX
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Law Office of Pho Ethan Tran, PLLC
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You can avoid paying for the debt by filing for bankruptcy. In Texas, your home is exempt from the bankruptcy estate as long as you are current and continue to make payments on the mortgage.
Answered on Jun 06th, 2012 at 9:03 PM
It sounds like you really need to speak with an attorney. Bankruptcy will affect ALL of your finances, not just this one debt.
Answered on Jun 05th, 2012 at 5:46 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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A voluntary repossession is reported on your credit report as a repossession. If you have a deficiency you can file chapter 7 to discharge it. If you are a homeowner you need to find out whether it is exempt under the bankruptcy laws. Consult an attorney as to the specific facts of your case.
Answered on May 31st, 2012 at 8:22 PM
Business Bankruptcy Attorney serving Raleigh, NC
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J.M. Cook, P.A.
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Filing for bankruptcy will discharge you from your personal liability for the car loan. Your parents' credit would only be affected if you default on your home loan through bankruptcy and they are unable to keep it current themselves.
Answered on May 29th, 2012 at 7:11 PM
Bankruptcy Attorney serving Kalamazoo, MI
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Debt Relief Law Center
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Probably bankruptcy does make sense- otherwise you'll have to settle with the car creditor. As for the house, you'd reaffirm the debt and stay current on your payments, the cosigner will be left alone.
Answered on May 29th, 2012 at 6:22 PM
Bankruptcy Chapter 7 Attorney serving Los Angeles, CA
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Bereliani Law Firm, PC
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I would say bankruptcy is the best option unless you are willing (or wanting to) settle with the creditor and pay them off. This would also take care of any unsecured debt you have and help you guys get a fresh start now that you have a baby and your fiance is unemployed. In regards to your home, is there any equity? I would recommend speaking to a bankruptcy attorney about the specific facts of the case so they can advise you. if the house has equity (and depending on how much equity you have) you have to see if you would qualify to file. If you do not have any equity then you are fine to file.
Answered on May 29th, 2012 at 5:19 PM
Daniel James Wilson
1. BK is a good option to discharge the repo debt. 2. Unless you default on your home loan effect on parents will be minimal to zero. If you default on home loan of course parents will be liable.
Answered on May 29th, 2012 at 2:26 PM
Bankruptcy Attorney serving Buford, GA
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Kenneth A. Parker, PC
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It depends on a lot of factors such as: Is there is any equity in the house and how much money you are making now. Even if your parents co-signed on the house, they will not be affected by your bankruptcy as long as you keep making the mortgage payments.
Answered on May 29th, 2012 at 1:49 PM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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The debt to Ford will be discharged. You are allowed to keep your home, your parents must be listed as co-debtors.
Answered on May 29th, 2012 at 1:40 PM
Glen Edward Ashman
You have a legal emergency and need to see a lawyer ASAP. A bankruptcy may affect your home, but so will the claim by the lender. You need to weigh all your options before you get sued, not after. That means act immediately and do not act without counsel.
Answered on May 29th, 2012 at 1:39 PM
2 Awards
I cannot advise you on whether bankruptcy is the best option for you. There are too many factors to discuss. It is certainly a viable option for you to investigate. Your home would remain unaffected as long as payments continued. I recommend you seek a consultation with an attorney to discuss your situation further.
Answered on May 29th, 2012 at 1:15 PM
Bankruptcy Attorney serving Hayward, CA
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Carballo Law Offices
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There is no difference between a voluntary and an involuntary repossession. It is a breach of the contract and you have no right to give back the vehicle. Therefore, the bank can sue you and your parents for the balance unpaid after the bank sold the car at an auction. Bankruptcy will certainly wipe your debt but not your parents' debt.
Answered on May 29th, 2012 at 12:58 PM
Bankruptcy Law Attorney serving Austin, TX
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Law Office of Susan G. Taylor
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Bankruptcy will eliminate any deficiency on the car, & the fact your parents co-signed will be of no import if you keep the home.
Answered on May 29th, 2012 at 12:46 PM
A voluntary repossession of a car will not, in and of itself, affect your bankruptcy at all. It would be wise, before you surrender the car, to have your attorney, or you if you are doing your own bankruptcy, complete the Means Test, first assuming you still have the car and then assuming you do not. Depending upon the specifics, the loss of the deduction for the car payment might be the straw that breaks the camel's back of the Means Test. You can always surrender the car AFTER filing. Either way, you are liable for nothing once the car is surrendered if you file and complete either a chapter 13 or a chapter 7.
Answered on May 29th, 2012 at 12:43 PM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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I do not know if you are in Arizona. If so, Ford can garnish wages and bank accounts, plus seize non-exempt property until you either pay them or file for bankruptcy. I am not sure what you need as far as the co-signed loan on your home. It depends on what you intentions are. Please understand that bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. Most Arizona bankruptcy attorneys offer a free consultation about the basics of bankruptcy.
Answered on May 29th, 2012 at 12:32 PM
Bankruptcy Attorney serving Overland Park, KS
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The Smalley Law Firm, LLC
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If you file for bankruptcy you will not be responsible for repaying the auto loan debt since you surrendered the vehicle. As for the house, you can keep your house in bankruptcy as long you continue to make the monthly payments. I suggest you consult with a bankruptcy attorney to discuss the specific details of your situation.
Answered on May 29th, 2012 at 11:49 AM