Repo of discharged auto after Chapter 7
I'm in Texas and filed for Ch7 in October 2005. The debts for a failed business as well as personal debts were included and discharged. I kept my auto and was told I would be able to keep it as long as I kept up the payments. Since that time I have fallen behind on the payments and am looking at a repo unless I can come up with about $1250 in the next few days. I will probably be able to get the money to become current but this is where the problem comes in. I have a $450 monthly payment that is really beyond my means and have only kept the auto because I felt it would be difficult to get a new auto loan after the bankruptcy. However I'm thinking this $1250 may be better spent as a downpay on a different auto with a lower monthly payment.
Here is my question: Since this debt has been discharged, if I go ahead and surrender the auto, would I still be liable for the difference after the leinholder sells it? My loan balance is approx $18,000 and blue book value is about 15K ...of course the leinholder would probably get less than that. I think that this can be a solution but don't want to end up in a worse situation than I am already in. I'm trying to minimize the amount of debt I'm carrying and don't want to get stuck with another $3K+ that I wouldn't be able to handle.
Thanks for listening... all help and advice is appreciated.
Re: Repo of discharged auto after Chapter 7
Did you not reaffirm the debt as part of your bankruptcy agreement, permitting you to keep the car but making you liable for the remaining debt?
Re: Repo of discharged auto after Chapter 7
Mr. Knowitall's question is key - if you did NOT reaffirm and the debt is discharged you can walk away from the car and aren't liable for the short balance. If you DID reaffirm then it's as if the car loan was excluded from the bk and you're going to have to deal with the creditor, trade, or sell.