How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Guru_Guy Your Own Question

Guru_Guy
Guru_Guy, Attorney
Category: Bankruptcy Law
Satisfied Customers: 2418
Experience:  Years of experience providing advice on bankruptcy and other alternatives to debt problems.
1987257
Type Your Bankruptcy Law Question Here...
Guru_Guy is online now
A new question is answered every 9 seconds

I am in an open bankruptcy.......chapter 7. I am keeping ...

Customer Question

I am in an open bankruptcy.......chapter 7. I am keeping my house and was going to reaffirm my car loan. However, I have been told that a reaffirmed car loan does nothing for my "starting over" credit. ( My car is a 2001, valued at 4500. My pay off is 5500. I have aprox. 2yrs left on loan to pay it off. it has 70,000 mi. on it. I am looking at a new car (2007) that I can buy on a "bankruptcy type finance program" for $35.00 more per month than the $285. payment that Im making on my 2001 car. The first payment would be due in 45 days. The new car is more fuel efficient than my current one, has new tires, very safe.....with all around airbags....my present car needs new front breaks immediately, the tires are worn, and the payment is due immediately......so I have to come up with money immediately. I have a good job but work straight commission and my commissions are down right now, but will get better in a couple of months. What do you suggest would be best for me?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Guru_Guy replied 6 years ago.
Hello,

If you have already confirmed as being qualified for Chapter 7, and have found a creditor willing to finance your new car purchase, despite your bankruptcy proceedings, and are sure you can afford the payments, it might make more sense in this case to go with the new car.

Your old car is what is known as "underwater" since you owe more on it that it is worth. Thus, you are basically losing $1000 by reaffirming the debt. It is also in need of repair and more expensive to drive. These costs would probably more that offset the increased monthly costs you will have with the new car.

What you were told is correct. You gain nothing on your credit rating by reaffirming the car loan. A bankruptcy is a bankruptcy. Reaffirming some loans will not help on what this bankruptcy will do to your credit rating.

Just be certain the new car is in good shape and that you can make the payments. You will not be able to seek bankruptcy protection for several years if you get stuck in a bad deal.

I hope this helps!

__________________

Please keep in mind that information in this forum is for informational purposes only. It is not legal advice and does not constitute creation of an attorney client relationship. Before acting on any such information, you are always advised to consult with an attorney licensed to practice in your jurisdiction who can take the time to review all the facts and laws relevant to your situation.
Customer: replied 6 years ago.
If I wait until the bk is discharged....and let my current car go back to bank, does it show up on my credit as a repo? or do I need to make the decision of what to do right now, while bk is still open...? and how long do I have after payment is due, before they can actually take the car? I really appreciate what you have answered so far, but I am still a little unsure and confused about what to do.
Thanks,
Deb
Expert:  Guru_Guy replied 6 years ago.
If you are going to return the car, it should be done as part of the bankruptcy. Otherwise it will show up as a separate negative action on your credit. Also, if the repo is not part of the bankruptcy, the creditor could come after you for the remaining amount due. Even if the debt is forgiven, that forgiveness would be taxable as income if done outside the bankruptcy. Therefore, if you are going to give up the car, it should be done as part of the bankruptcy. It should be turned over voluntarily.

I hope this helps!


___________________

Please keep in mind that information in this forum is for informational purposes only. It is not legal advice and does not constitute creation of an attorney client relationship. Before acting on any such information, you are always advised to consult with an attorney licensed to practice in your jurisdiction who can take the time to review all the facts and laws relevant to your situation.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.
 
 
 

Related Bankruptcy Law Questions

Chat Now With A Bankruptcy Lawyer
Guru_Guy
Guru_Guy
27 Satisfied Customers
Years of experience providing advice on bankruptcy and other alternatives to debt problems.