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VanDLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 833
Experience:  Chapter 7 & 13
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I have about $40000 in unsecured debt (credit card and line ...

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I have about $40000 in unsecured debt (credit card and line of credit). I also have a mortage and two car loans in my name (one is my husband''s car that he pays for but since he is on SSD he was not able to get a the car loan, so I got it). My credit has always been good. THe mortgage and the car loans are current and always have been. I am not behind on any payments but the monthly payments on the unsecured debts is killing me. The last few months, I been incurring late fees. I called the creditor (Bank of America) and they can''t (won''t) help me because as they put it I am not in default. I tried CCCS but they say that they can''t help me because their monthly payment is incompatible with my budget. What do I do now? I have considered Chapter 13 bankruptcy to keep my house and cars but in looking on the internet, I see that any bankruptcy proceedings would constitute a default on my car loans even if they are current and the lien holders could repo the cars even after signing a reaffirmation agreement. What should I do? I''ve considered not paying one of the credit card accounts and putting all of that money toward the other account to kepp that current and eventually pay it off.


I will be happy to assist you. First of all, if the car lien holders signed a reaffirmation agreement they could only repossess your car should you THEN go into default after the agreement. If you were in a Chapter 13 bankruptcy they would not repossess your home or car, that is the point of a Chapter 13, to give you the opportunity to get caught up and repay creditors pennies on the dollar. If you are current on home and car payments almost all lenders will reaffirm the debt and you keep them.

You must be able to have a steady income to qualify for Chapter 13. You can keep (reaffirm) your home and cars in a Chapter 7 as well, but must meet the means test for your area. If you are current on your house and car payments and meet the means test, you can discharge most debt. Student loans, child support payments, and tax liens are usually not dischargable. This may the route you want to go if you can meet the means test, you would be discharged in 4-6 months, and the credit card payments and line of credit go away altogether, and you would reaffirm your home and cars. We have been even negotiating the rates on the current loans down in a reaffirmation.

You should discuss your situation with a bankruptcy attorney in your area, there will be many that give consultations for free, and then you will have all your options.


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