Legal Question in Bankruptcy in California

Re: Filing for Bankruptcy

If you do it right, you can actually make the auto lenders take less money at a lower interest rate. The most common type of BK is a Chapter 13 which is for people who have some steady income. Your lawyer (after sitting down with you and filling out all the forms) submits what's called a Chapter 13 Plan to the court. After the BK is filed the repo person can't touch your cars, and if the court approves your Plan you can dramatically lower your payments for 3 to 5 years; and maybe longer.

Re: Filing for Bankruptcy

A lot depends on how long you've had the cars. If you've had them for more than 2-1/2 yrs, it may be possible to pay less for them than what you actually over a 3-5 yr Chapter 13 Plan.

If you surrender one or both, you should probably file Chapter 7 bankruptcy anyway so that you won't be liable for the deficiency after they sell the car(s) for less than what you owe.

Re: Filing for Bankruptcy

There is no way to give you advise without a lot more information (your income, when you purchased the cars, your other debts, etc.) You should sit down with an attorney and discuss all the issues. You should not make this decision solely based on responses to such a general question. Most BK attorneys will sit down with you for no charge to analyze your situation and advise you on the best course of action.

Re: Filing for Bankruptcy

I have to agree with Attorney Shem-Tov - nobody on this list can give you specific advice about what you should do without first meeting with you, and reviewing your financial situation. Yes, it may be possible to reduce your car payment in a chapter 13, but guess what, until someone carefully reviews your finances, nobody can say for sure that you can even qualify to file a chapter 13 bankruptcy! Most attorneys do a free initial consultation in bankruptcy matters - take an hour or so of your time, and meet with someone before you get too far down the path. Most attorneys fees are very reasonable, and if you find a qualified, experienced attorney, they will do the absolute best for you, given your circumstances. If bankruptcy is not the solution, then a good, qualified experienced attorney will also tell you that. Good luck - it is hard out there, but bankruptcy may provide you with some relief.

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