Many of TAIEBLAW’S clients want to file bankruptcy and state they do not want to list their vehicle since they are current on making payments.
When you file bankruptcy everything is on the table. You have to disclose all your assets and all your debt or you may be liable under federal law.
The other major issue with a vehicle is that if you file a chapter 7, you have to fill out a Statement of Intentions and advise whether you wish to surrender the collateral, redeem or pay the fair market value of the collateral or reaffirm the collateral, which is a new promise to pay an old debt.
Under the old law which was prior to October 17, 2005, there was a concept known as ride through where you would just continue paying your car payment and there was no issue. However, under the present law if you do not reaffirm a debt, you may still have the vehicle repossessed even though you are current with auto payment. Not all auto lenders will repossess if you don’t reaffirm ,but you do not want to take a chance.
Steven N. Taieb, Esquire has advised all his clients to go through the process of signing the reaffirmation agreement and mailing it to the creditor. However, if you have a deficit in your budget, the Judge will schedule a phone conference and since it is not in your best interest and it is an undue hardship, you want to keep the vehicle but have the reaffirmation agreement denied.
If the Judge denies the reaffirmation agreement and you then default on the car payment, your will only lose the vehicle but you won’t be held responsible for the deficiency.
If you have any questions concerning this matter or any other matter contact TAIEBLAW at 856-235-4994 or visit our website at TAIEBLAW.COM, and schedule a FREE initial consultation.
Steven N. Taieb, Esq. has been a South Jersey Bankruptcy Attorney for over 33 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.