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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2820
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I recently retired as a Army Vet with 90% disability. I have

Customer Question

I recently retired as a Army Vet with 90% disability. I have encountered financial hardship since my 50% decrease in income from the VA; its my only source of income. I'm maxed out on credit cards, loans and can't pay them all. I just purchased my home a year ago but now is under review for a new loan workout program due to my missed payments and foreclosure proceedings was froze until this new plan is approved. I will eventually keep my home and I want to keep my three cars but they are not current in payment. How will a Chapter -7 save my material assets (house, three cars)? or what can or what do I need to do ignored to make this goal achievable?
Submitted: 5 months ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 5 months ago.

chapter 7 can only discharge your consumer debts, credit cards, unsecured loans, medical, utilities, etc. You will have to pay for the house and cars if you want to keep them. A redemption on a vehicle may be available based on your income and the vehicles valuations. You would need to seek out a 3rd party who does redemption loans though to fund it.

Chapter 13 is a debt repayment plan, whereby you can consolidate debt and pay back over 3-5 years based on your budget. You can often pay unsecured debts as low as pennies on the dollar in many instances. You can pay the value of the car, with the rest being treated as unsecured if the car loan is more than 910 days old. You can cure mortgage arrears thru the plan as well.

You would be best to seek out a local bankruptcy attorney to review these options, as chapter 13 is difficult if you have reduced income. You would need enough to support your monthly payments on your necessities, and your bankruptcy plan payment.

Another issue is that you want to pay for 3 vehicles? Court may question why you need 3 vehicles, and also pay for 3 vehicles too. That's something to consider as well. Let me know your questions. thanks