Hello and thank you for allowing me the opportunity to assist you.
Question: “i have a private student loan through bank of america that is co-signed by my parents. I am current on the payments and would not want this debt involved if i choose to pursue bankruptcy. Will my parents will affected by my decision? Am i able to choose which debt is considered?”
Answer: You can choose to exclude certain debt from your bankruptcy. People usually do so with regard to their car loans and mortgages so they can keep their cars and homes. You could theoretically do so with regard to any debt, though. Having said that, you do not need to exclude your student loans since by law they are not dischargeable in bankruptcy anyway. Therefore, your bankruptcy shouldn’t affect your parents at all.
Question: “I own an older vehicle that has been paid off for approxiametly two years, will it be affected by my decision?”
Answer: In California, you can protect up to $2,775 of your vehicle’s value. Therefore, if your vehicle is worth less that amount, it won’t be sold. If your vehicle is worth substantially more than that amount, then it may be sold, in which case the first $2,775 will be given back to you, and the rest will be used to repay your unsecured creditors.
Have I satisfactorily addressed your concerns? If not, then please feel free to ask for clarification.
DISCLAIMER: Please understand that the complexities of most legal problems cannot be adequately addressed in this setting, and that I am only licensed to practice law in the state of Maryland. Accordingly, you acknowledge (1) that we have not formed an attorney-client relationship, and (2) that my post is general information only and not specific legal advice.
Question: “What standard is used to evaluate the worth of the vehicle? Am I able to choose not use my vehicle as a form of repayment to the creditors? What if I don't have any other form of repayment?”
Answer: The bankruptcy trustee will likely look at the bluebook value, as well as take into account its condition and the price that similar vehicles are being so for in the area. Unfortunately, you can’t choose not to use your vehicle to repay your creditors. It’s all based on value. The theory is that although you may need a car, you don’t need a car that’s worth more than $2775, and a more expensive vehicle can be used to repay your debt.
I will point out, however, that I was assuming you’d file for Chapter 7 since you mentioned income requirements. If you file for Chapter 13 instead, then you may be able to keep your vehicle if it’s worth more than $2775. Of course, that will require you to make monthly payments to the bankruptcy trustee, and you won’t be discharged for 3 to 5 years.
If I chose to go through a free consultation with a bankruptcy lawyer would this evaluated during that time?
Question: “If I chose to go through a free consultation with a bankruptcy lawyer would this evaluated during that time?”
Answer: Are you asking if the lawyer will evaluate your vehicle during a free consultation? Your lawyer may help by pointing to various sources to help prove the value of your vehicle. Obviously, he’s not going to be an authority on the subject of vehicle value, however. Generally, what your lawyer will do is gather evidence (such as bluebook value, etc.) that the vehicle is worth $2775 (or less), and then list the vehicle as worth that amount. If the bankruptcy trustee argues otherwise, then he will produce the evidence. If the bankruptcy trustee still disagrees, then it may need to go to the judge.
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