Secured Auto Loan

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Jimbojones

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Secured Auto Loan
« on: June 09, 2015, 08:32:43 AM »
Hi Everyone,

I have talked to a trustee about my situation and im thinking of full bankruptcy due to this separation and the amount of child support I will be paying. My ex wife really wants to keep the truck that is solely in my name (loan is 43000 truck is 25000) and at first I agreed. Looking into it if i declare bankruptcy and she decides she doesnt want it or whatever.. im liable for that amount and its to late post signing bankruptcy.. i do have a few question.

I have missed one payment and also deferred two payments on this loan.. from what i understand, the payments need to be up to date to keep a secured loan.. is it possible that the bank could want to take the truck just based on missing a few payments, even if i get it up to date??

to be honest i would prefer to include this upside down loan in the bankruptcy but i dont want to leave my kids without some sort of transportation.. shes having troubles getting another auto loan since all she has is support payments.

insurance is a whole other issue  : /

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NotATrust-E

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Re: Secured Auto Loan
« Reply #1 on: June 09, 2015, 09:14:27 AM »
Even if you were 100% up to date with your payments, if you go bankrupt, the bank can take the truck back. However, this is relatively uncommon - banks would prefer to take your money on an ongoing basis rather than have to deal with the vehicle. The short answer is yes, you do need to keep the payments current on a secured loan, just like you would even if you weren't bankrupt.

If I remember correctly, you can return the keys to a house/vehicle to the trustee during your bankruptcy and the shortfall would be included in your bankruptcy. This would likely give you some time to make the decision as to how you want to proceed. However, I'm not sure about this, so check with your trustee.
 
From monetary point of view only, it sounds like including the truck in your bankruptcy is a good idea. Otherwise, you're stuck for years paying for an asset that's going down in value during a time when you're short on cash. You might have trouble getting a loan in the future, but it gives you a fresh start; you might decide that you don't need to spend that amount of money on transportation this time around.

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Jimbojones

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Re: Secured Auto Loan
« Reply #2 on: June 09, 2015, 09:39:03 AM »
From what I recall, once I'm in bankruptcy I will be liable for the shortfall if the payments couldnt be made and they repo'd the truck. Its a sticky situation as I'm trying to keep something for her to drive but she may have to just suck it up and get something cheap.. I dont know what to do!

 

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