Assets for bankruptcy

BLCOHEN529 says:

If you can maintain your current auto payments on the cars and have an agreed written agreement on how to handle your present autopayment arrearages you can either walk away relatively unscathed by your Chapter 13 experience or allow it to be converted to a Ch-7 liquidation so long as you have a written agreement to reaffirm your auto loan agreements.

The answer is in your total debts and income. If you are paying off a large amount of unsecured (credit card) debt, this makes some sense…On the other hand if your debt is primarily secured debt and taxes you are only temporarily treading water.

Obtain good financial counseling from a source with access to your situation.

Good Luck

thomas p says:

The law changed drastically on October 17, 2005. my understanding it does favor the bankrupt unless her income is below the state median level. Since the car is the subject of a secured transaction, I am surprised the car was not abandoned or left out of the bankruptcy reorganization. You must convert to a Chapter 7 discharge bankruptcy if allowed under the 2005 amendments. No, you cannot "walk away." You need the Bankruptcy Court’s permission and discharge of your debts. That was bad advice. Good luck with your serious problem.

Alfie says:

You’ve been given some good advice and some not so good advice. You definitely need to speak to your bankruptcy attorney ASAP. Before you walk away from your trustee payments, there are a few things to consider.

The first thing that your attorney needs to consider is your budget. Even though your Chapter 13 repayment plan has been confirmed by your Trustee and by the Court, there are options. Has your income decreased? Have your expenses increased? When you originally completed your schedules three years ago, you were paying less for food, shelter, and fuel.

Since you are still in your repayment period and have not been discharged, your schedules, budges, and plan can still be amended. If your trustee payment is too much for you to comfortably manage, your payment can be changed. Of course this will mean more paperwork, possibly another confirmation hearing, and maybe a creditor objection, but it’s not outside the realm of possibility.

So, what will happen if you just walk away? There are a variety of scenarios and there are simple scenarios. If your car payments were delinquent when you filed Chapter 13, somewhere in your plan you are making up for the amount in arrears on your autos. If your bankruptcy was filed prior to the Bankruptcy Reform of 2005 your plan possibly "crammed down" the amount of your vehicle balances to the value of the cars. There is also a cap on the interest rate that the court will allow as well.

If you stop making the plan payments, your creditors will take your cars. If your bankruptcy is dismissed for failure to pay the trustee payments, you are no longer protected by bankruptcy and the Automatic Stay. Without the stay you can be sued, your wages can be garnished, you are open to collection and repossession.

Please speak with your attorney before you take the advice of anyone else.