Surrendering car loan with negative equity?

[Qwerty42]

What is the name of your state? Ohio

I just want to verify something. I am about to file Chapter 7 bankruptcy, one of the main reasons is I have a car with payments that are too high and negative equity. I am under the impression that I can surrender the car/loan when I file for bankrupty, is this correct?

 

[bigun]

Yep, quit paying and tell 'em to come get it. The deficiency balance will be discharged in the k.

 

[Qwerty42]

Let me make sure I understand this right...do I want until I the day of the hearing to surrender the car or what?

 

[bigun]

Once you file bk and stop paying, you are protected by an automatic stay. The creditor must then petition the court to have the stay lifted so they may repo the car. The court will grant the request quickly.
If you just want it over and done with, just call the creditor once you are indefault and make arrangements to surrender the car. You don't have to wait for the 341 meeting.

 

[Qwerty42]

One last question...I owe the IRS some money because I screwed up on my tax return a couple years ago. I'm pretty sure I CAN'T claim this on my bankruptcy. If I am right about that, do I still put it down as someone I owe money to?

 

[bigun]

The IRS would be a priority creditor. Yes, name them as a creditor.

 

[Ladynred]

You say 'a couple years ago' .. how MANY years, precisely ?? Some taxes are dischargeable. If you filed a return AND the taxes became due 3 or more years ago, they can likely be discharged.

 

[Qwerty42]

It was my 2003 tax return.