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Author: ishtarastarte Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308858  
Subject: Re: Chapter 7 or Chapter 13?? Date: 1/1/2012 6:47 PM
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You really need to talk to a bankruptcy attorney.

You are asking questions that are very specific.

Some things may depend on the state you live in, some things depend on assets and income.

From your response, I take it that you didn't read one of joel's posts.

Bankruptcy is to protect your assets from being seized. You don't have a house to protect, and it appears your savings is all in protected retirement accounts.

If you are employed, and you default on large credit card debt, the credit card company can sue you and attach your wages and/or bank account.

Bankruptcy could protect you from that.

If you're unemployed and have no assets, they basically can't come after you because you are insolvent.

It makes little sense to declare bankruptcy then (assuming you can continue to pay on the $9,000 car loan).

It would make more sense to declare while you are working and have a wage to protect.

However, if you're worried about not being able to pay the car loan, then it might make sense to go the bankruptcy route and reaffirm the car loan.

BUT THESE ARE QUESTIONS FOR A BANKRUPTCY ATTORNEY.

If your cars are currently valued at about $5k each, why do you need a new car "soon"? Are there mechanical problems?

Why do you assume a new-to-car has to cost $10k and require a loan?

I ask because last year I junked my 1992 pick up truck and bought a 1991 Nissan Sentra for $1,500.

I junked the truck for multiple reasons:

1. I had not been able to afford routine maintenance on it for several years.
2. It needed a whole new exhaust system and a radiator. It was leaking oil very badly from the front and rear seals (a major repair). I'm pretty sure the last month I drove it, I blew a head gasket. It needed tires, and brakes. It had 169,000 miles on it.
3. I had been in a minor accident, and the passenger door didn't close completely. One window was stuck closed and the other was stuck 4" open. I didn't feel it was safe for my now-16 year old to learn to drive on, especially since I couldn't afford the repairs.

If I had been able to afford routine maintenance on it or the repairs, I'd still be driving it.

The 1991 Nissan Sentra only had 57,000 miles on it when I bought it last spring, which was a huge stroke of luck. It's in great shape for it's age, much better gas mileage than the truck and again, only cost $1,500. Paid cash, spend about another $200 getting it smogged and registered. No where near $10,000 and no loan required.

Ishtar
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