Questions before we give the OK to file

What is the name of your state? NC

We finally had our bankrupcy consultation for filing with our new attorney. Actually, we consulted with his paralegal, whom we were told "She knows all the ins & outs of BK & can answer ANY questions you may have". We will meet with the attorney AFTER everything is typed up and ready to file and we can ask him any final questions.

I must admit, she seemed to know a LOT more than the attorney we decided NOT to go with!

Now I have questions. (CH7)

She told us that they do not re-affirm anything! No mortgages,
auto, etc. She said that the reason being is that if for some reason down the road should we decide that we don't want to keep the mortgage or auto, simply let it go back & it's all covered under BK. In like turn, simply continue to make payments as usual and it's all yours.

1) Is this correct? I thought you had to re-affirm your auto or mortgage so they can't take it back. Would we run into problems later by not doing so?

Also, she said that when they get re-affirmations, they simply throw them in the trash & not even let the client know, thus saving the client from being in debt.

2) Is this common practice? On one side of the coin I think this should be ONLY up to the client. On the flipside, I can see that if you're going to file, you'd be better off to eliminate as much as possible, (but ....?)

We were also told that Lowes, Sears & Capitol One are the only 3 cards that will sometimes allow you to keep an open line of credit, yet many clients have trouble later on with Sears.

3) Has anyone had any experiences with these 3 companies? Has any other credit card company re-affirmed with an open credit line? It would be nice to have a SMALL limit on 1 major card for emergencies (to be used correctly, I would gladly trade a $25,000 limit for a $300 limit.)

One more thing, she looked at our re-assessment for tax value on our property (which does state that it is fair market value) and said that it most certainly WILL be sufficient proof for value.

4) IS she correct? WILL they accept that? Otherwise, should the trustee use our last appraisal (though we know our last appraisal was incorrect) we would be over our exemption limit.

Anyone ??

Thanks,
Taffy

Speaking only from experience *G*

#1, she is right, keep paying and keep living, stop paying and get ready to pack your bags and give back.

#2, Sears will want money or their stuff back, most of the time they will settle for pennies on the dollar, don't know about the others.

But your attorney or paralegal should have given you the what if's of choices, not make one for you. My attorney was wonderful!! He laid everything out on the table, took payment plan, and explained everything in detail! I signed papers, gave him a check, he made me call him the next day with my final decision. He stated this is a 10 year credit report commitment and didn't want me to regret it later.

#3, Why would you want any more credit cards, isn't that what got you in trouble in the first place??? (speaking from exerience, although the car accident and divorce didn't help) Don't worry about not having any cards, offers will come outta the wood work! In three years I've paid cash for everything, no problem. If I had the plastic I would have been more tempted to purchase unwisely. It's a good feeling not writing a check to someone else every month, and frankly I couldn't think of anything right now that I would be gald to be paying for on credit?!?!?

#4, I had a real estate agent come in and give me a walkaway price on the house, and he put it in writing. It was lower than the tax assesment.

[Ladynred]

There's one small flaw in Neighbor's credit card advice... if you NEVER have a need to travel you'll be fine. BUT, if you ever have to fly somewhere or maybe rent a car because yours is in the shop, you can forget it. Rental car companies will NOT take anything but a credit card. If you offer cash, then they want $500 up front before you ever see the keys... even then they might not give you a car.

Its a very sad state of affairs that for some things you can't use cash any more, only a rotten piece of plastic is accepted.

My only comment on the reaffirmation thing.. personally I think its unfair of them to force you out of your home and to give up your transportation if you decide you can afford them and want to keep them. I don't think I'd take a lawyer who wouldn't bend on that one, but then, I don't like anyone telling ME what to do .. LOL.

My sister was able to keep one or two credit cards, small balances, I don' t remember what they were, but they were others besides what you've listed.

I didn't re-affirm my home, and I'm not leaving. As long as I continue to pay the loan I can stay in my house. And at the time I wasn't behind except for the one payment the attorney told me not to pay. So I don't understand why some people say if you don't re-affirm you lose your home or other property? I'm just thinking the attorney should have given all the options and the outcome of those options.

And as far as a credit card, BK is supposed to be a fresh start and readjustment, that's why I don't want any plastic, and if you have a VISA or other logo rentals (cash) won't be a problem. hmmmmm, maybe I'll change my name cash-n-carry

[Ladynred]

Neighbor,

I'm sorry, the VISA logo thing is incorrect. My fiance has been thru this repeatedly recently with ALL of the rental car agencies. NONE of them (his travel agent checked at least 6) will accept a debit card when you go to pick up a rental car ! It doesn't matter if the thing has a VISA or MC logo or not, they will REFUSE it every single time. We have been told this is are hard policy and they won't budge on it. They claim it has something to do with the liability insurance, but who know what its REALLY all about. Its more likely that they figure the money in the account can be drawn out at any time after you pick up the car so the money won't be there to pay the rental car company. Its a crock, but its a fact.. debit cards DO NOT work for picking up a car.

They'll accept it when you give it back though.. go figure.

Cash ? Who carries THAT much cash around, and there's no guarantee they'll even rent you the car if even if you happen to have that much cash to give them ! I know.. we've been through this !!

MD must be much different, I rent a truck once every 3-4 month's, no problem. I did have a chance to rent a car and was going to pay, BUT my BF said his treat!! But any-who, no plastic and proud!!

[Ladynred]

Interesting.. because the last time he tried to rent a car from Avis at Baltimore airport using his debit card, Avis refused it, would only take a credit card.. and that was just a few weeks ago. He ended up having to take Amtrak to Philadelphia.

Actually, what got us into trouble was the fact that a client that we'd worked with for almost a year stiffed us for over $70K at the end of the project. (We are self employed). Also we had a signed contract to do over $300K over the next 2 years. Needless to say, that won't be happening now. As a result, in good faith, We had incurred a lot of debt for supplies as well as living expenses. So, we are the ones left holding the bag and the bag broke!

I must admit I get sort of sick on my stomach when I look at a credit card now. Unfortunately, emergencies do happen. I think my husband and I will be handling things a lot differently now with both business and personal.

My main concern is not re-affirming. But what you all are saying is that as long as you keep pmts. up to date, then no worry on taking your property, right? That's what is important to us.

In like turn, by NOT re-affirming, if we decide a few months down the road not to keep an auto loan, then if we let it go back, it WILL fall back under the original bankruptcy instead of a repo, right?

This is where my confusion comes in.

Thanks again,
Taffy

My main concern is not re-affirming. But what you all are saying is that as long as you keep pmts. up to date, then no worry on taking your property, right? That's what is important to us.

In like turn, by NOT re-affirming, if we decide a few months down the road not to keep an auto loan, then if we let it go back, it WILL fall back under the original bankruptcy instead of a repo, right?


The above is exactly what my attorney told me, I can walk away from this house at any time, and the bank will just come get it, as it is entered in the BK (that's not what I want, nor does the bank want the house). The bank acts as tho nothing happened. And with the extra I'm paying I'll be paid off before the loan is due.

I can understand how BK happens, just so happens I saved more $'s than I've ever saved in my life, and have no credit cards (haven't missed them). I make good money so cash is not a problem as far as paying for things. Emergencies do come up, but that's what you save for, not go in debt for.

I had a chance to get a loan and pay off the CC's and debts, but the credit went south before the finance co. came through. You learn alot about which credit cards will work with you and which won't (had payoffs less than 50% at the time, as long as I could get a loan.)

But have the attorney fully explain how that works (entering property in BK and keep paying.) Good luck, keep putting something away for a rainy day, and you'll be fine.

[nailtech]

we were told as long as we were up to date on payments and kept payment up to date they were automatically reaffirmed..... we received reaffimation papers and signed them just to make sure, but we were told we didn't have to but by us making payments it automatically reaffirmed us...... hope that helps.. of course ours(cars and house) were classified as "Exempt"..... that might make a difference.....




(A)

within thirty days after the date of the filing of a petition under chapter 7 of this title or on or before the date of the meeting of creditors, whichever is earlier, or within such additional time as the court, for cause, within such period fixes, the debtor shall file with the clerk a statement of his intention with respect to the retention or surrender of such property and, if applicable, specifying that such property is claimed as exempt, that the debtor intends to redeem such property, or that the debtor intends to reaffirm debts secured by such property;

Remember, TX has different laws regarding homestead property. I didn't receive papers reaffirming?? Nor did I sign any? I just keep paying and they keep saying "thank you." Maybe that's why the attorney said not to make a payment when he did?? I did double pay the next payment, and I don't remember if that payment was on time or not?

But he did say if you don't pay it would be about three months (paper-work) and the house would be theirs under Chapter 7. A year after I still wasn't sure if I would walk away or stay, so that prompted another call to the attorney (he was such a sweetie.)

Heck, just over into Wash DC, the laws were much different and the $ amounts were much higher as far as what you could own. That's why it's always best to consult an attorney and get all the facts when it comes to property, what is a given in one state may not be in the next.

A) Be sure to ask questions, and get straight answers;

B) Will your attorney be there for you a year from now, three years from now (mine is);

C) Check your credit report anywhere from 30 days to 3 months down the road after, BK's are reported different to the lenders after BK. Their not as eager to make it look better as they are reporting late pays.

[nailtech]

Texas has different exemptions, but the laws are all federal... that was a U.S. code I posted..... Thats why its called Federal Bankruptcy.... we did not go under Texas bankruptcy rules..

[URL=http://www4.law.cornell.edu/uscode/#TITLES]U.S. code**************...[/URL]

got under the title 11 for bankruptcy....

all I know we were told we didnt have to reaffirm,... the payments we made were automatic,.... but if you dont reaffirm, and you get behind, they will get the vehicle or house quick because you have no papers binding you to the loan and they do not have to work with you......

.... but if you dont reaffirm, and you get behind, they will get the vehicle or house quick because you have no papers binding you to the loan and they do not have to work with you......


AMEN, that's what I've/we've been tring to say. She wanted to know would the stuff be taken away with out reaffirming? The original poster may want to let go of the car in the future. With reaffirmation she/they wouldn't be able to that easy, without any hassles or what ever. She/they could be stuck with a bill of difference by reaffirming (difference between what owed and sold for), later down the road.

A big thanks to all.

Ladynred: I appreciate all your help in the past few weeks. It seems that you're always there to lend a much needed hand. Hats off to you!

A Neighbor: I really appreciate your imput as well. I hope I did not come off negatively. If I did , I apologize. I am just freaking out over all of this. (And the fact that we were in an accident Tuesday doesn't help matters! ) At this point we really don't want any credit. We are just concerned that our business will suffer somewhat with no supplier accounts. Most folks don't like to pay 1/2 to 3/4 down for a job. (In order to cover expenses) Cash only will be a challenge in THAT respect, but we are pressing forward! I am glad that you are doing so much better after your bankruptcy. That gives me hope & encouragement to go on!

Nailtech: Yes, that's exactly what I needed to know! Thank you very much. Of course we plan to keep our home. My concern was if something happened later down the road and we ever get slightly behind, they might be able to take it more easily rather than work with you! In our case, I think we'd better re-affirm on the mortgage at least. Just for good measure.

Thanks to all again,
Taffy

Hi a neighbor,

You must have replied while I was typing Just read your new post.

Between the both of you, you have helped me a great deal. Many, many thanks!

Exactly! I wouldn't want to be stuck with the $$ difference of a repo. In like turn, wouldn't want to loose the house over a 15 day late or something either.

I guess I'm just spooked by all the "what ifs".

The paralegal we talked with was great, sure hope that our attorney is! We won't talk with him until everything is typed up. I'm trying to make sure everything is good to go with few (if any) changes before we meet with him, which is our final step.

Thanks again, I'm sure I'll have more questions later on, LOL

Taffy