How will a voluntary repossession affect my bankruptcy? 23 Answers as of June 06, 2012

MY fiance lost his job at the same time I went on maternity leave for three months. We were unable to catch up with our car payments when I returned to work so I voluntarily turned the vehicle back into Ford. I am now being sued by them for $10,000+. Is bankruptcy the best option to avoid paying them this fee? Also, I am a homeowner but my parents co-signed for me. How will this affect that situation?

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Law Office of Pho Ethan Tran PLLC
Law Office of Pho Ethan Tran PLLC | Pho Ethan Tran
You can avoid paying for the debt by filing for bankruptcy. In Texas, your home is exempt from the bankruptcy estate as long as you are current and continue to make payments on the mortgage.
Answer Applies to: Texas
Replied: 6/6/2012
Olson Law Firm | Edward M Olson
It sounds like you really need to speak with an attorney. Bankruptcy will affect ALL of your finances, not just this one debt.
Answer Applies to: Michigan
Replied: 6/5/2012
Alvin Lundgren | Alvin Lundgren
Bankruptcy will discharge the auto debt. Bankruptcy could be a good solution if you have additional unsecured debt (credit card, medical) debt. As long as you pay your home loan it will not affect your parents.
Answer Applies to: Utah
Replied: 6/1/2012
Bankruptcy Law office of Bill Rubendall
Bankruptcy Law office of Bill Rubendall | William M. Rubendall
A voluntary repossession is reported on your credit report as a repossession. If you have a deficiency you can file chapter 7 to discharge it. If you are a homeowner you need to find out whether it is exempt under the bankruptcy laws. Consult an attorney as to the specific facts of your case.
Answer Applies to: California
Replied: 5/31/2012
J.M. Cook, P.A. | J.M. Cook
Filing for bankruptcy will discharge you from your personal liability for the car loan. Your parents' credit would only be affected if you default on your home loan through bankruptcy and they are unable to keep it current themselves.
Answer Applies to: North Carolina
Replied: 5/29/2012
    Law Office of Kristen Allard Shier
    Law Office of Kristen Allard Shier | Kristen Allard Shier
    Bankruptcy is a good option to help you get rid of the deficiency balance remaining from your auto loan. With regards to the home mortgage your parents co-signed for, as long as you continue to make the mortgage payments, your parents should not be affected by your bankruptcy. However, if you were to stop making mortgage payments, your parents would be on the hook for the mortgage.
    Answer Applies to: Colorado
    Replied: 5/29/2012
    Debt Relief Law Center | Roger J. Bus
    Probably bankruptcy does make sense- otherwise you'll have to settle with the car creditor. As for the house, you'd reaffirm the debt and stay current on your payments, the cosigner will be left alone.
    Answer Applies to: Michigan
    Replied: 5/29/2012
    Bereliani Law Firm | Sanaz Sarah Bereliani
    I would say bankruptcy is the best option unless you are willing (or wanting to) settle with the creditor and pay them off. This would also take care of any unsecured debt you have and help you guys get a fresh start now that you have a baby and your fiance is unemployed. In regards to your home, is there any equity? I would recommend speaking to a bankruptcy attorney about the specific facts of the case so they can advise you. if the house has equity (and depending on how much equity you have) you have to see if you would qualify to file. If you do not have any equity then you are fine to file.
    Answer Applies to: California
    Replied: 5/29/2012
    Steven Harrell, Attorney at Law | Waymon Steven Harrell
    You need to file a Chapter 7 and discharge the deficiency claim from the repossession.
    Answer Applies to: Georgia
    Replied: 5/29/2012
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    1. BK is a good option to discharge the repo debt. 2. Unless you default on your home loan effect on parents will be minimal to zero. If you default on home loan of course parents will be liable.
    Answer Applies to: Colorado
    Replied: 5/29/2012
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Chapter 7 will take care of the money due to Ford and with the house, it will have no effect on your parents as long as you pay for the house during the bankruptcy period.
    Answer Applies to: New York
    Replied: 5/29/2012
    Kenneth A. Parker, P.C.
    Kenneth A. Parker, P.C. | Ken Parker
    It depends on a lot of factors such as: Is there is any equity in the house and how much money you are making now. Even if your parents co-signed on the house, they will not be affected by your bankruptcy as long as you keep making the mortgage payments.
    Answer Applies to: Georgia
    Replied: 5/29/2012
    R. Jason de Groot, P.A
    R. Jason de Groot, P.A | R. Jason de Groot
    The debt to Ford will be discharged. You are allowed to keep your home, your parents must be listed as co-debtors.
    Answer Applies to: Florida
    Replied: 5/29/2012
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    You have a legal emergency and need to see a lawyer ASAP. A bankruptcy may affect your home, but so will the claim by the lender. You need to weigh all your options before you get sued, not after. That means act immediately and do not act without counsel.
    Answer Applies to: Georgia
    Replied: 5/29/2012
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    I cannot advise you on whether bankruptcy is the best option for you. There are too many factors to discuss. It is certainly a viable option for you to investigate. Your home would remain unaffected as long as payments continued. I recommend you seek a consultation with an attorney to discuss your situation further.
    Answer Applies to: Nevada
    Replied: 5/29/2012
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    There is no difference between a voluntary and an involuntary repossession. It is a breach of the contract and you have no right to give back the vehicle. Therefore, the bank can sue you and your parents for the balance unpaid after the bank sold the car at an auction. Bankruptcy will certainly wipe your debt but not your parents' debt.
    Answer Applies to: California
    Replied: 5/29/2012
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    You can file bankruptcy for the repo. You keep the house and keep making the payments, assuming you do not have significant equity in it. If you have equity, see a lawyer.
    Answer Applies to: California
    Replied: 5/29/2012
    Law Office of Susan G. Taylor
    Law Office of Susan G. Taylor | Susan G. Taylor
    Bankruptcy will eliminate any deficiency on the car, & the fact your parents co-signed will be of no import if you keep the home.
    Answer Applies to: Texas
    Replied: 5/29/2012
    Attorney At Law | Harry D. Roth
    A voluntary repossession of a car will not, in and of itself, affect your bankruptcy at all. It would be wise, before you surrender the car, to have your attorney, or you if you are doing your own bankruptcy, complete the Means Test, first assuming you still have the car and then assuming you do not. Depending upon the specifics, the loss of the deduction for the car payment might be the straw that breaks the camel's back of the Means Test. You can always surrender the car AFTER filing. Either way, you are liable for nothing once the car is surrendered if you file and complete either a chapter 13 or a chapter 7.
    Answer Applies to: California
    Replied: 5/29/2012
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    I do not know if you are in Arizona. If so, Ford can garnish wages and bank accounts, plus seize non-exempt property until you either pay them or file for bankruptcy. I am not sure what you need as far as the co-signed loan on your home. It depends on what you intentions are. Please understand that bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. Most Arizona bankruptcy attorneys offer a free consultation about the basics of bankruptcy.
    Answer Applies to: Arizona
    Replied: 5/29/2012
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    Bankruptcy can be an option. You could also attempt to settle for less than what the company wants. But if you want out and not pay any debt, then bankruptcy is the best option. For the most part, if you file for bankruptcy any one that co-signed for you continues to owe the money. As long as you are paying the home, your parents should be fine. But if you have a co-signor on the vehicle that person will owe the money.
    Answer Applies to: California
    Replied: 5/29/2012
    The Smalley Law Firm, LLC | Cary Smalley
    If you file for bankruptcy you will not be responsible for repaying the auto loan debt since you surrendered the vehicle. As for the house, you can keep your house in bankruptcy as long you continue to make the monthly payments. I suggest you consult with a bankruptcy attorney to discuss the specific details of your situation.
    Answer Applies to: Kansas
    Replied: 5/29/2012
    Wajda Law Group, APC
    Wajda Law Group, APC | Nicholas M. Wajda
    Bankruptcy could very well be your best option. However, to determine which type of bankruptcy you can/should file you would be wise to speak with an attorney and go over the various details of your entire situation. As for the house, it is likely irrelevant that your parents co-signed on the loan. As long as you continue to pay on that loan, their credit is not affected regardless of whether you do a bankruptcy.
    Answer Applies to: Nevada
    Replied: 5/29/2012
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