Can I choose to keep certain debts if I file bankruptcy Chapter 7?

Question

I have a large amount of debt that I am unable to pay. I want to file bankruptcy. Let me start by saying I am ashamed to be in this situation so, please do not bash me, just please provide sound advice.

There are two debtors that I would like to continue paying on. One of them holds the pink slip to my car (my credit union) and the other is a credit line that is owned by my grandfather but he put my name on it to use.

Can I file and not include these debts?

Please help, thanks!

Added DETAILS:

1. No assets, other than the car, which only $2,000 owed.
2. In California.
3. How do I reaffirm the debts I'd like to keep?

Thanks!

Answer 1

Sizematic,

First off I just want to say that it is a hard thing to do, especially if you have a family. Second, laws differ from state to state.

Chapter 7 basically means that you are filing to "dissolve" ALL of your debts. A little different from 13, which is a payment plan in disguise. Both have THE SAME effect on your credit score. I don't suggest the 13 because statistics show that most people don't follow through.

In Illinois, you have to list ALL of your debt. As a matter of fact, you are commiting a crime if you don't.

However, that doesn't mean that you have to loose your car or your house for that matter. There is something called Affirmation; which means that you can 'keep and promise to pay off' certain debts. You can affirm any debts; but why would you anyway since you are claiming bankruptcy? You wouldn't unless you want to keep your house or your car.

Remember, once you affirm a debt, YOU will be liable for it after the chapter 7. And, you won't be able to claim chapter 7 for another 7 years. So, you better want to keep it.

Your car you can reaffirm.

Did you co-sign your car???? If not, then it's NOT YOUR DEBT to claim or reaffirm.

Answer 2

You can reaffirm a debt under chapter 7. Most companies will allow you to reaffirm a debt since they would rather receive their money then a loss/write off.

I filed bankruptcy a few years ago and I reaffirmed my home and car. Just make sure you do not have more then $20 in your bank account when you go to court for the bankruptcy hearing as they can take any cash on hand and that includes bank accounts. 401 are free from being touched.

The courts cannot take items such as clothes, jewlery, appliances, electronics etc... They can take items that are paid in full such as cars, homes etc to pay off other vendors you were in debt to. You can file an "exempt" (the Bankruptcy Code will allow the debtor to keep certain "exempt" property). This would mean you have to reaffirm the debt. The original creditor cannot up the interest rate, or change the monthly payment...BUT they can collect the property if you fail to make the payment(s) as scheduled (most have this law without bankruptcy but after bankruptcy they will be a lot stricter on following it less time before demanding payment etc), a creditor cannot change the contract or demand payment in full since you are reaffirming the original debt/contract for goods received.

Answer 3

I was on the same situation and this site helped me QUOTEQUOTING.NET-

RE Can I choose to keep certain debts if I file bankruptcy Chapter 7?

I have a large amount of debt that I am unable to pay. I want to file bankruptcy. Let me start by saying I am ashamed to be in this situation so, please do not bash me, just please provide sound advice.

There are two debtors that I would like to continue paying on. One of them holds the pink slip to my car (my credit union) and the other is a credit line that is owned by my grandfather but he put my name on it to use.

Can I file and not include these debts?

Please help, thanks!

Answer 4

I would say out of experience, do NOT file chaper 7 all they do is liquidate your assests until the debt is paid. If you file 13 then it is set up in a nice program, and you get to keep your car. If you do 7 they take your car and pergaps your house depending on how big your debt is. Besides, I didnt think you could still file chapter 7 anymore. Good luck though, I know how it feels from very personal experience. Better off with 13. Look into lawyers though, some will riip you off and make it worse. Happened to me. So just be aware of the rules and the regulations. Chapter 13 is over 5 years, but it is worth it if you can keep your car and other assests. You will still be paying your credit union but you will sit down with someone and have a debt payment plan set up for you to figure out which debts are important to get rid of.

Answer 5

First of all, No need to be ashamed. The law was created for people who were overwhelmed. Debt should not ruin anyones life and take away their constitutional right to happiness.

It depends on which state you are in, usually a home, car sometimes credit cards can be re-affirmed. Although bankruptcy is a federal law most states have their own laws & exemptions and it can be filed under either one. (people choose which one will give them more benefit & deductions, both state & federal offer the same protection.)

Answer 6

Yes, you can reaffirm a debt. Most commonly you'd do this to avoid reposession of a car or foreclosure on your home. Discuss this with your attorney as there are rules that govern it and you need to know the risks and benefits going in.

Answer 7

All costs and supplies could be lined on your financial disaster 7 submitting. in case you intentionally held some thing back that could have been lined you are going to be able to denied BK. The trustee assigned works for the lenders and that they choose each thing listed to verify if the lenders may well be paid back.