Federal Way, WA asked in Bankruptcy for Washington

Q: Bankruptcy Ive a creditcard& a carpmt from same credit union. If I file can they sue me or can those be included in ch7

So I have my car and credit card from the same credit union. And I am not able to afford either payment. Hints trying to file chapter 7. If I file would I be able to get both of them written off? Or will they go after me and sue me for filling?

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2 Lawyer Answers
W. J. Winterstein Jr.
W. J. Winterstein Jr.
PREMIUM
Answered
  • Bankruptcy Lawyer
  • Boyertown, PA

A: No one can hope to prevail by claiming some sort of damage simply because you have filed for bankruptcy relief. If you meet the eligibility requirements for the bankruptcy chapter of your choice, you're bullet-proof from any such claims.

However, it may be that some creditor may seek to have its claim excepted from discharge (the grounds for that are set out in the bankruptcy code), or the trustee or any creditor may file an adversary proceeding in the bankruptcy court seeking to deny you a discharge (the limited grounds for this are also set forth in the Code).

Valid, perfected liens against any of your property are not diminished or removed by your bankruptcy discharge (unless the lien is somehow legally defective, or not "perfected"). You can expect that any credit card you have will be suspended or canceled almost immediately after you file a bankruptcy petition. And if you fail to make your regular payments on the vehicle loan, the CU will be able to seek relief from the automatic stay to repo and sell the vehicle.

When you file a Ch. 7 case, you have three choices with respect to property you have which is subject to a valid lien: you can surrender the collateral in full satisfaction of the creditor's secured claim, "redeem" the collateral by paying off the lien amount in cash, or reaffirm the debt, in which case, if the creditor agrees to the reaffirmation, you keep the car and the payment obligation remains as a legally enforceable debt.

If at all possible, seek the advice of bankruptcy counsel before you file a bankruptcy, and specifically, ask about your options for dealing with property subject to a lien.

Timothy Denison
Timothy Denison
Answered
  • Bankruptcy Lawyer
  • Louisville, KY

A: If you file, they cannot sue you snd they can be included in the bankruptcy.

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