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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2890
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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We filed Bankruptcy in 2006. It was dismissed in 2007. We

Customer Question

We filed Bankruptcy in 2006. It was dismissed in 2007. We decided to keep a car and now with the economy the way it is my husband is not selling as much insurance as he would like & I am not working. We called Wachovia and asked if they could lower the interest so the auto payment could go down. Their response was that there was nothing they could do because the car was included in the bankruptcy.   Is this true or are they just not wanting to negotiate. Thank you
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 8 years ago.
If you attempted a chapter13 repayment, the lender may have flagged the account.
If you want to keep it, you have to make your payments on time and stay current. They are not obligated to change your payment terms. They may just be using bankruptcy as an excuse for why. It could be their corporate policy. There is no law in this respect though. You might want to look into taking out a loan with another company, paying off this one, and starting fresh with another company. Otherwise, you can also trade in the car for another, paying off this note. Be careful though, if you don't get the value for the car that equals what you owe, you will be upside down on the new car note..even if it is lower interest.
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Customer: replied 8 years ago.
We Filed Chapter 7 not chapter 13. Is your answer still the same?
Expert:  Terry L. replied 8 years ago.
Technically yes. I assume with your reply that you got Discharged, not Dismissed.
If you signed a reaffirmation agreement for the car, you are on the hook for the loan.
if you did not sign a reaffirmation, then the debt is technically discharged thru the bankruptcy, and you can give it back and walk away from the loan, not owing any more, and go get something new. If you didn't sign the reaffirmation, some creditors will let you keep the vehicle if you make payments on it. So, if the lender is unwilling to work with you, and you didn't sign a reaffirmation, I would think it may be better to give them the vehicle back and you can go get something more affordable. if you signed the reaffirmation, you are stuck with the balance.