Advice on Bankruptcy or Voluntary Repossession Alternative - The Bills.com Blog

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Advice on Bankruptcy or Voluntary Repossession Alternative

Tuesday, Jun 10, 2008

Question: In June of 2007 I purchased a 1999 vehicle. The car has turned out to be a headache, which has caused great financial difficulties in repair after repair and trying to make my payments of the loans & expensive insurance and meet my living expenses. My ex husband and I filed bankrupcy aprox 6 yrs ago I have worked hard to rebuild my credit, my question can I re-file a bankruptcy or is it better to voluntarily return the car and pay my other credit cards myself?

Answer: Before you take any decisions, I would suggest that you take a good look at your credit report. See where you stand right now as far as your credit score is concerned. Bankruptcy is a serious issue and you can only opt for bankruptcy protection so many times. Bankruptcies stay on your record for about 7 years (depending on the state you reside in) and so do repossessions. Therefore, it is really difficult to advice you between one or the other.

If you feel that returning
the vehicle will allow you to get back on track with all your other finances, then my suggestion would be to voluntarily surrender the vehicle and not to file bankruptcy. In addition, the bankruptcy laws have changed since you last filed for it, so you have to see which one of the bankruptcy options you would qualify for (chapter 7 or chapter 13). For more information on the types of bankruptcies, please visit Bills.com .

Before you take any action, I recommend that you speak with a qualified bankruptcy attorney to discuss the relief available to you in bankruptcy. You can search for a American
Bankruptcy Institute certified attorney in your area by visiting the ABI’s website . Consulting with an attorney does not mean you are going to file bankruptcy, but it will help you better understand the options available to you. A qualified bankruptcy attorney should also be able to carefully analyze each aspect of your financial situation to advise what non-bankruptcy solutions may help you. Given the limited information provided in your question, I suggest that you consult with an attorney.

I hope the information I have provided will help you Find. Learn. Save.

Best,
Bill
www.bills.com/blog/

Also, make sure to get a free financial health check-up with Bills IQ!

User Comments

1. Posted by lee port on Sunday 15th February 2009 06:09

i am unemployed due ti illness, my wife works and the debts are in my name. if i went bankrupt can they claim her earnings, thanks

2. Posted by Bill on Tuesday 17th February 2009 09:46

That really depends on whether you live in a community property state. If you don't then you are pretty safe, but if you do, it might effect your wife's credit as well. Please consult with a bankruptcy attorney before taking any decisions.

3. Posted by joe on Tuesday 10th November 2009 19:48

Just read about voluntarily surrendering a vehicle. We have an rv that has got us in a bind. If we surrender it to the bank, in excellent condition; what can the bank do to us then? thank you

4. Posted by Bill on Wednesday 11th November 2009 08:57

Please read All about voluntary repossession to learn more the consequences of a vehicle repossession. In particular, read the section "Deficiency balance" to understand this issue and what it means to you. I also suggest you read Collections advice to learn your rights and options for resolving the deficiency balance.

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