Chapter 7 and Car Note

[TR76]

What is the name of your state (only U.S. law)? IL

It's been three years since our discharge and at the time, my attorney advised me not to reaffirm our car note just in case we had any additional employment trouble (jobloss led to the filing) so we could walk away from it and it would not affect our credit. Recently, our employment situation has changed once again and the interest rate on the note (24% which makes our payment almost twice what it should be for this car) has become too much for us to handle. I called to ask about lowering the rate since we have only 16 months left to pay it off, and I inquired with a few insititutions about refinancing but it is not worth as much as we owe since the rate is so high. We've decided to try and find something used or very cheap new since our credit is now what is considered good but the dealers I've went to won't pay off the car and we'd be upside down on a loan, leading to the same problem: high interest rate.

So my question is this, can we just stop paying on this car and let them come get it and not be financially responsible for it since we did not reaffirm without any negative reports to our credit? I assume yes based on the information our attorney gave us but want to make sure before we make a decision. I did call him but he has yet to call me back, which is unforunately nothing new

Thank you for any replies.

[bigun]

Not sure about the credit reporting but, if you didn't reaffirm the note, you can stop paying and will have no liability for a deficiency balance.

[Who's Liable?]

If the car note was indeed included in the BK, you can walk away from it. The bank, or note holder CANNOT contact you regarding the debt owed, as it is against the law punishable by monetary means. It's best not to contact the note holder regarding what is owed.

Your credit report should state "IIB"(included in BK) and have a 0 balance due. Anything otherwise is detrimental to your credit report and should be corrected.

Of course a dealership may want a higher down payment or increase your payment amount.