Vehicle and Chapter 7

[simba101]

I filed ch7 in Florida with an attorney. My 341 is in 2 weeks. I originally wanted to keep my vehicle. However, I just found out that I need a new transmission and it is JUST out of warranty. Needless to say, I certainly don't have $4000 to pay for a new tranny. Is it possible to change this in my bankruptcy papers to reflect that I want to surrender my vehicle now instead of keep it or is this something that I just bring up at the 341? I wouldn't want to delay anything just because of this change. And if I do this, I'm assuming that I would immediately stop making payments, right? Also, the payments that I've been making would now be considered preferential payments, right? How would that affect me? My car loan is with the bank that I have my checking account with. Would that affect anything?

As always, thanks for your help. You guys are the best!

Simba

[Methuss]

Your attorney will have to file an ammendment to your filing. Contact him ASAP to have this done.

[LadynRed]

And if I do this, I'm assuming that I would immediately stop making payments, right?

Yes. However, the car payment would be added back into your disposable income number, and that could cause you problems, unless you intend to immediately get another car.

Also, the payments that I've been making would now be considered preferential payments, right?

No. Payments to secured creditors are NOT considered preferential, you have to pay to keep the property. Just because you now decided NOT to keep it, does not make the payments preferential.

My car loan is with the bank that I have my checking account with. Would that affect anything?

Maybe. If you're behind in your payments, the bank may try to exercise its right to set-off against your checking account. Its one of the few exceptions to the automatic stay so you need to plan this with your lawyer. If it were me, I'd be moving that checking account to an uninvolved bank ASAP.