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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17080
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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Hello, I have a Chapter 13 bankruptcy that was just recently

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Hello, I have a Chapter 13 bankruptcy that was just recently dismissed. The automobile I own was also included in the bankruptcy. Now that the BK is dismissed, the lender is calling wanting to either reposses or have me pay $4200 towards the back payments plus double payments over the next 2 to 3 mos.

The car is only worth about $9500 and I haven't yet heard from my second lien holder (which I was told by their area handling seconds in a Ch 13 BK) that it was written off or unsecured credit card companies for collection.

Should I move forward with financing another new car and let this one get repossessed or should I try to pay the $4200 in back payments & future payments.

My concern is if I let them repossess, how I can not go back to court for a deficiency balance.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

Why was the chapter 13 dismissed?

WALLSTREETESQ :

Can you purchase a new car or finance one?

WALLSTREETESQ :

Do you have the money to pay the balance?

WALLSTREETESQ :

It would be best for your credit if you can make the payments for the car,

WALLSTREETESQ :

however if you cannot afford it, then it would not be in your best interest, as they are asking for a significant amount.

WALLSTREETESQ :

If possible you can file a chapter 7, bankruptcy later to discharge the debt as well, if you cannot afford the car payment,

Customer:

The bk was dismissed for failure to make payments after about 2 years in. The amount of auto repairs became so much that I had to divert monies from paying bk to auto in order for transportation to work. My atty recommended a dismissal. I can qualify to purchase another vehicle and obtain financing. I have the money to pay the $4200. I realize it's not their issue with the circumstances leading to my bk, however, it just seems that they would want to negotiate further versus repo'ing the car, selling it wholesale & then inevitably taking a loss and selling the loss to a collection company.

WALLSTREETESQ :

that is if you qualify for a chapter 7

WALLSTREETESQ :

If you dismissed the case due to auto repairs,

WALLSTREETESQ :

consider buying a new car,

WALLSTREETESQ :

and file a chapter 13 again,

WALLSTREETESQ :

if you have other debts,

WALLSTREETESQ :

and include the balance if any of the prior car,

Customer:

My biggest issue is paying the regular payment since the cars value is $9500 and the balance is $30k. The drawback with the new car & refiling is that my BK atty said that it would not be favorable if the sales price of the new car exceeded $15k. With that in mind, most everything at that price level is out of factory warranty and I don't want to be back in the same situation with auto repairs as I was.

WALLSTREETESQ :

I would suggest a lease of a new car not a finance as the payment would be high,

WALLSTREETESQ :

If the car value is 9500, and you owe $30,000 it is not worth the payment now,

Customer:

What about the repercussions of the deficiency balance and legal action?

WALLSTREETESQ :

if they do sue you, at a later point you can settle with them for a much lower amount, or file a bankruptcy at that point,

WALLSTREETESQ :

If you want to keep the car now, and owe over $20,000

WALLSTREETESQ :

you are wasting a large amount of money, over several years,

WALLSTREETESQ :

you could most likely settle any judgment for 20-30%

Customer:

True, a settlement on a deficiency balance, even if 20 cents on the dollar would be better than paying the full amount for an aged auto that is definitely going to continue to deteriorate.

WALLSTREETESQ :

right, and you can threaten them with a bankruptcy

Customer:

sounds like a plan. I appreciate your help.

WALLSTREETESQ :

If you have any further questions please do not hesitate to ask.

WALLSTREETESQ :

Good luck, and if satisfied with our service please provide us with positive feedback, thank you.

WALLSTREETESQ and 2 other Bankruptcy Law Specialists are ready to help you