Banruptcy, how does it work?

[Sray_86]

What is the name of your state? Connecticut

I need to know what to do if possible. I just moved to CT not too long ago from Florida. I used to have great credit, but this past year and a half has been tough. As of March 11, I will be 5 months behind on my car payment which is $212.31/mo), I'm approximately $5,000 in debt to my credit cards, owe about $500-600 to Sprint/Nextel, as well as some other outstanding debts and bank accounts. I'm 21 years of age. I'm honestly considering bankruptcy, but the biggest concern I have is what will happen with my debt with the car payment? If I wait for them to take the car back, file now, or give the car back or whatever, will the bankruptcy be able to apply to it, or is it true that car payments cannot be attatched to a bankruptcy? It seems pointless to file if I'm still going to owe all the money for the car. All I do know is I need help, and I need help bad to get out of this hole.

 

[bigun]

Deficiency balances from an auto deficiency are discharged in bk.
If you should file or not is a different story. How much do you owe total and what is your income?

 

[Who's Liable?]

What is the name of your state? Connecticut

I need to know what to do if possible. I just moved to CT not too long ago from Florida. I used to have great credit, but this past year and a half has been tough. As of March 11, I will be 5 months behind on my car payment which is $212.31/mo), I'm approximately $5,000 in debt to my credit cards, owe about $500-600 to Sprint/Nextel, as well as some other outstanding debts and bank accounts. I'm 21 years of age.

Age doesn't matter when you are a legal adult. You need to add ALL your debts together. This includes Student Loans, Personal Bank Loans, credit cards, payday loans, personal loans from friends(girlfriends too!) etc.. ANY debt you owe to whomever MUST be included in your BK.

I'm honestly considering bankruptcy, but the biggest concern I have is what will happen with my debt with the car payment? If I wait for them to take the car back, file now, or give the car back or whatever, will the bankruptcy be able to apply to it, or is it true that car payments cannot be attatched to a bankruptcy?

Whoever told you car payments can't be discharged is an idiot and needs to keep their day job. The only things that can't be discharged are Student Loans. When you attach your car loan to the BK, the finance company will send you an reaffirmation agreement. It is up to you to decide if you want to follow that route. You are NOT required to sign it. It is a legal form that states you agree to continue paying for the car post BK, and all the terms of the loan survive the BK. There is no penalty for not signing, but some Finance companies try to tell you differently. After that, wait for them to pick it up.

 

[Ladynred]

You are NOT required to sign it.

Weeelll.. reaffirmations are voluntary, but if you want to keep the car, under the new law you HAVE to reaffirm it - no more ride-thrus in most districts.

If you can't afford the car, let it go back to the bank. Go buy a used car that you CAN afford, preferably with CASH, and drive it for a couple of years until you can get back on your feet. It's pointless to keep a car you can't afford.

Unless you've got a LOT of other debts, what you've mentioned so far is not much debt - nothing perhaps that 2 jobs and living within your means won't fix in a few years or work.

 

[Sray_86]

Weeelll.. reaffirmations are voluntary, but if you want to keep the car, under the new law you HAVE to reaffirm it - no more ride-thrus in most districts.

If you can't afford the car, let it go back to the bank. Go buy a used car that you CAN afford, preferably with CASH, and drive it for a couple of years until you can get back on your feet. It's pointless to keep a car you can't afford.

Unless you've got a LOT of other debts, what you've mentioned so far is not much debt - nothing perhaps that 2 jobs and living within your means won't fix in a few years or work.

Depending on the hours available to me, I make about $16k-22k a year. Rent in this area is about $500 a month at the lowest.

Car Payments: I am now 5 months behind, and it is $212.31/mo. I owe a total of a little over 5k for it still. Means I owe about $1200 from the last five months (due to the late fees and everything).

Car insurance: I fell two months behind and they just cancelled my coverage. I owe them $360 total.

Cell phone/internet: I owe nextel a total of $600.00. $300 from my cell phone and $300 from when I used to have wireless internet for a laptop I bought a year or two ago.

Hospital Bills: Approximately $1500-2000 in hospital bills now, if not a little more is owed. One bill is in Maryland, two of them here in Connecticut.

Credit Cards: I have three credit cards. One of them was a $2000 limit and I have approx $2400 I owe now because of all the fees. I owe about $1200 total on the other two credit cards.

Past Rent: Still owe rent to one of my prior landlords. That is $1075.00.

Total: Approximately $8,835.00 if you only count payments. About $14,000 if you count total owed.


I have a feeling I'm missing something else, but those are the major things. With the income I make I can barely pay rent, get food, wash my clothes, and all. You figure I make about $300-400/week. So we'll say $1300 a month. $500 for rent, $200 for food, $50 for phone, $40 for laundry. If I can avoid any other bills, I have money to try to catch up. But with the car payment (and then insurance of course), all the money is then gone. Car insurance was $180/mo and car payment $212.31. That still would leave me $100 but then you have to take money out for gas, cigarettes (a habit I'm working on quitting), etc.

I agree though that hard work and budgeting could solve the problem, but at the same time I'm hearing lots of things. Like if my car gets taken I not only have to pay off the remaining debt for the car but also the fees it took for them to repossess it and to fix any damages that there are to the vehicle. I also see the amount owed increasing each month. My credit is already shot now... at least I imagine it is. I had a 720 or so for a credit score at 19, but now I've got debts I haven't been able to pay for a good 1-2 years. And they just keep adding up. I've had points of homelessness and everything. In my mind bankruptcy would be the best option if it does get rid of all or most of these debts. Then I just need to focus on surviving and I could put the "extra money" each month towards something like college or what have you instead of giving every dime to creditors. I just want to get out of this hole I got myself into and to make something better of myself. I'm tired of working fast food and basic construction.

 

[CMLANDLORD]

An expense you can cut down is that $40 laundry. You're working fast food and construction. Its not like you need dry clean that type of apparel. $40 X 12 months = $480. That's 3 1/2 months insurance payments!

 

[bigun]

What is the value of your car?
Personally, I think your problem is more lack of income than, overwhelming debt. You can barely support yourself without paying these bills. How is bk supposed to help? You'll still be in the same fix post bk-living paycheck to paycheck and, you'll still need a car.
Were I you, I'd not file over that small amount of debt. If you could sell the car and come close to breaking even I'd do it and either use public transportation for awhile or pay a beater from a buy here pay here place. Plus, get that pt job and get this stuff under control.

 

[elainebenice]

in my opinion, you shouldn't file bankruptcy, especially if it is only to save your car. as others have said, sell the car and buy a cheaper one that you can afford. then, work towards paying down your other debt.