Question regarding Ch 7 and Auto Loan

[Kodiak]

What is the name of your state?What is the name of your state? Utah

I have a question regarding a Chapter 7 I plan on filing in the next month. I am forced into a Bankruptcy due to restructuring at my work. They closed us down and transferred us into other departments. While I am thankful I remained employed it involved a $20000 pay cut and I am getting to the point where I am juggling the money every month to pay the bills.

I have 2 vehicles financed, both with negative equity. I owe $16000 on one and $10000 on the other. I will surrender at least one of the cars during the bankruptcy. Here is my question, will I get myself into trouble with the courts or creditors if I go out before I file a chapter 7 and buy a $5000 car and finance it, then I would surrender both of my current vehicles and have a car pay ment that is over $125 lower than my current car loan. I don't know if this is legal to do or not because I would be filing bankruptcy within a month after buying the vehicle.

The other thing I could do is just keep one of my current vehicles, but I figured since I am filing a Chapter 7, I may as well reduce as much of my debt as possible including car payments. Thanks for your replies in advance.

[giggle50]

Under the current law, this is perfectly acceptable. You'll have to [URL=http://www.directlex.com/chapter7-bankruptcy/reaffirm-debt.htm]reaffirm[/URL] the car loan after filing to keep the car.

If you wait too long, the new bankruptcy law requires [URL=http://www.bankruptcycreditcounselors.com/law/]bankruptcy credit counseling[/URL] and will really bog you down in your efforts to file.

[Ladynred]

You'll have to reaffirm the car loan after filing to keep the car.

No, he/she won't. UTAH does NOT require reaffirming or redeeming to keep secured property. If you reaffirm, its YOUR choice.