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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I just lost my job of 22 years. If I file bankruptcy, will

Customer Question

I just lost my job of 22 years. If I file bankruptcy, will I lose my automobile? My condo is worth less than I paid so am considering just doing a short sale as I may have to move across the country to live with family if unable to find a job in time.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 1 year ago.

cfortunato :

Hi - my name is XXXXX XXXXX I'm a Bankruptcy attorney here to assist you.

cfortunato :

1) Have you lived in Virginia continuously for the past 2 years?

cfortunato :

2) What is the current market value of your auto?

cfortunato :

3) What is the balance of any car loan(s) for the auto?

Customer:

Lived in Va since 2002; purchased 2011 Sorento $23,000 in 2010; have made 32/72 pmts @416.91 with $16,676 in pmts left; payoff is unknown, value unknown at the moment. I make $98,000/yr, have worked in MRI past 20 yrs . My condo paid for in 2006 $314.000,just refinanced in December (before I lost my job) with $297,000 bal but only worth about $230,000 presently so would have to walkaway/short-sale if moving to Az to be with family. Job market probably flat in Phoenix still so dont know how long it would be to find a job; if I did file bankruptcy, could I choose to continue payments on my vehicle; can't job hunt or go to work without a vehicle.

cfortunato :

Thank you for your response.

cfortunato :

Since you still owe over $16,000 for your car, you would be able to keep it if your file a Bankruptcy, and if you continue to make the car payments.

cfortunato :

Additionally, you will be allowed to continue to pay for the car, if this is what you want to do.

cfortunato :

I am not sure if you have a question about your condo?

Customer:

Don't know what options I have for that..just saved $400/mo refinancing it (closed 12/21!!) lost my job Jan 4 (worked there 23 yrs, they like getting rid of the highly paid for newbies..forget about experience these days it seems) Could perhaps rent it but now being out of work, would not be able to pay for new paint, etc to ready for renting. This all just happened so I am reeling

cfortunato :

That is really sad, and I am truly sorry for you.

cfortunato :

I think the main consideration regarding your condo and Bankruptcy depends on whether or not there is a HOA involved.

Customer:

Yes there is

cfortunato :

Then you have to take into account a little-known fact about Bankruptcy - which is that any HOA dues that accrue after your Bankruptcy is filed and before the condo is sold in a short sale or a foreclosure are not dischargeable in the Bankruptcy.

cfortunato :

For this reason, it is recommended that anyone who has HOA dues to pay, and who wants to file a Bankruptcy, wait as long as possible before filing.

cfortunato :

Ideally, that person would want to file after the condo is sold.

Customer:

Ahhh...fortunately I live in a sought after area, unit overlooking water, walking to VRE-(train into DC) so dont think it would just sit, however I know short sales can go on foreve; my re-finance started in JULY and ended in Dec due to the straining banks/amt of R.E loans happening now.

cfortunato :

You are correct - short sales and foreclosures can take years to be completed, even in desirable neighborhoods. (and in undesirable areas, short sales and foreclosures often do not happen at all, and the owner remains liable for the HOA dues for the entire time.)

Customer:

Ok, thanks for that advance...it may beunnecessary but don;t know how long this process will take and limited financial resources with only 1 paycheck more coming. When does bankruptcy become the best way to go? I dont know how long credit cards co's will work with you making less than min pmts. I owe about $10,000 plus the car; never late on pmts, over 720 credit...I just hate this

cfortunato :

Some credit card companies are understanding and will work with you, and others will not.

Customer:

Cant think of anything else presently..thanks

cfortunato :

However, since you do not own valuable assets, there may be little if anything, the credit card companies can do to you if you do not pay them.

Customer:

I have antique furniture, can they take that?

cfortunato :

Maybe - what is the approximate amount the furniture could be sold for?

Customer:

Probably less than $8000. Could I put it in storage so it is just not there?

cfortunato :

In Virginia, you are allowed to keep up to $5,000 worth of furniture (after subtracting around 10% cost to sell). You would probably be able to keep your furniture if it can be sold (at an auction) for less than $8,000.

cfortunato :

However,if any of your creditors sued you, you may have to provide a list of your assets - including valuable furniture - even if that furniture is in storage.

cfortunato :

In such an event, you would not want to refer to your furniture as "antique". You would want to refer to it as "old".

Customer:

So I guess the question is, is it more advantageous credit-wise to file bankruptcy or pay accounts late?

cfortunato :

By ''advantageous'', do you mean less harmful to your credit score?

Customer:

Yes and in consideration to the future towards purchasing a home etc. My son seems to have recovered fine.

cfortunato :

Both will result in a large reduction to your credit score, but filing a Bankruptcy usually results a 100-point larger reduction than paying credit cards late.

Customer:

Wow! Thanks for your help, you've been excellent

cfortunato :

And it is correct that one's credit score starts to improve one year after a Bankruptcy is filed (if there is no further negative activity).

cfortunato :

You're welcome!

cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and other Bankruptcy Law Specialists are ready to help you

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