Filing bankruptcy would not protect either your home or your car in the long run. You would get a few months relief from collection and repossession activity for the judge to look over the case, but because both the house and the car have liens on them from their respective lenders, they are secured collateral in a bankruptcy case and if you are unable to make the payments on either or both, the lenders will be given the right to take both of them back from you anyway. A bankruptcy helps when you have a large amount of unsecured creditors (like credit card debt) -- the bankruptcy will either wipe it out or permit you to pay pennies on the dollar in a repayment plan over 5 years (this is determined by your income level). Regarding taking action outside of bankruptcy -- you can certainly return the items but a voluntary surrender of the house or car is pretty much treated the same as a repossession on your credit reports unless you are able to negotiate something different with the lenders in their reporting in exchange for returning the property (it is completely up to the lender). I wish I could tell you something different here, but there is not a lot that you can do with retaining possession unless you can negotiate with them on the payments or a surrender that will not hurt your credit so badly.
Please let me know what further questions you have on these issues,
Hello again Gary --
If you have a vehicle and you are making the payments and they are current then you are permitted to sign a reaffirmation of the debt in bankruptcy and the court will let you keep the car and the lender cannot repossess it from you just because of the bankruptcy -- you would have to fall behind on the car payments or the lease payments and then the new lender could repossess it on you.
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