Aug
17
What can you keep after you file Chapter 7?
Filed Under Bankruptcy FAQ, Pre-Filing, Reaffirming Loans
Can I keep my Car after bankruptcy?
Can I keep my house after bankruptcy?
It’s a simple question and one that everyone in this boat has on their mind. What can I keep after I file for Chapter 7 Bankruptcy. We declared that we wanted to keep our home and car. Because the declared value of our jewelry (i.e. wedding ring) was what the court would consider low, it’s not even a concern. Regarding furniture, televisions and computers (like those I bought with the Dell credit card) are not a problem. They were purchased between 2-3 years prior to us filing for bankruptcy and depreciation has made their resale value very low.
Lets talk about the car(s). We own two cars:
- 2000 4-door (family car) Chevy which we own out right and has no loans/liens on it. The attorney used Kelly Blue Book.com as a means for appraising the vehicle. I don’t know that I necessarily agree, but he declared its value at $1,800.
- 2000 4-door Hyundai which I currently owe $3,500 on.Kelly Blue Book values my car at $1,200. Again, I disagree with that but it shows that I have reverse equity on the car and makes repossession from the bank an option that they wouldn’t want to take.
Seriously, if they took the car from me they’d need to recover the loss on the difference, which would never happen. To allow me to reaffirm the loan is a much smarter move. So after we file and the court declares it final, the banks attorney will send the reaffirmation paperwork. It doesn’t lower my payments or increase any more time on the loan, it just tells the bank that I promise to keep paying it.
Now the house on the other hand is fairly easy (as I understand). The new laws do not require you to reaffirm your mortgage with your lender. There will be no need for new paperwork or the dreaded thought of going through closing again. You keep your house, you keep your mortgage payments and in a few months after you file, you’re an ordinary customer to the bank again.
My next post will be about preparing for the hearing.
- AJ
Comments
8 Responses to “What can you keep after you file Chapter 7?”
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Don’t waste any time in sending back the paperwork that the banks attorney sends you. Don’t think for a moment that they won’t repossess your automobile. Get it done!
I am considering claiming bankruptcy and I am not sure what to do. When do you know it is time? I was told my income is too high but I can’t pay my bills anymore.
Kayla’s Mom,
I make too much money for a chapter 13 3 year repayment but that didn’t stop us. My suggestion is to contact an attorney and have him or her review your circumstances with you. Don’t stress yourself out over your salary. Honestly, it was not an issue for us.
I wanted to fight and my wife didn’t agree. Between the both of us and 3-4 jobs that we juggled I could swing it. Problem was the unexpected and to be honest my kids were growing up without me/us. By filing bankruptcy we now have a new start and more time to spend with the kids. I have NO regrets.
Best of luck to you.
Joe
did anyone who filed chapter 7 bankruptcy have their car taken from them? I have an old car…ita 1994 plymouth colt 3 door sedan which values on kelly blue book to be about 1400 dollars. can they still take it from me/.
can you file bankruptcy owning 2 houses and 2 pieces of lands. (the land is already paid for).
Thank You for your answer.
We are currently filing for chapter 7 and will need to downsize into an apartment or small rental home. Our furniture is over 5 years old and we were wondering if we could sell it in order to save enough for a deposit on a new place. We don’t want to be burdened trying to get rid of everything at the last minute whe it’s time to move. Please advise. Thanks
How are you guys doing? It breaks my heart to read things like this.
Ironically here I am again almost a year later looking at the same bankruptcy website. I considered claniming bankruptcy last year and insteaf I took a loan from my 401k an d paid down as much of my debt as I could. I owe about 50,000 and I paid down about 15,000 (after also paying back family, electric company, cable co. etc. only 15,00 was left of my $20,000 loan. My fiancee was laid off in June of last year and was nota able to find another full time job. He was in the construction field that died with the economy. So, once I paid down the credit cards with my loan I again began using the cards to pay living expenses, car insurance, food, gas, cash advances for rent….anyway, here I am a year later, I have over $500 a month deducted from my take home pay to pay back the 401k loan and I have stopped paying my credit cards back as of this month, August 2009. I wish i had gone trough with the bankruptcy last year…I am expecting our second child in a few months. With our combined income we still dont make ends meet. It is going to be very rough for us for a while but somehow we will survive this too. I hope…