Stopping Repossession is Different Than Preventing Foreclosure
For some, bankruptcy is a way of protecting a vehicle from being repossessed. Others face looming foreclosure and need their bankruptcy to provide the protection of the automatic stay to stop foreclosure. Let’s consider a situation in which your ex-spouse was ordered to pay for your vehicle according to the divorce decree. Or to cover paying a credit card which you incurred together in the marriage. If your ex does not actually pay the vehicle, or chooses to file bankruptcy in order discharge responsibility, you still hold the responsibility for paying the vehicle or for the credit card debt which the creditor may seek to collect or harass or sue you for payment.
If you want to keep the vehicle and you’re the one in possession, you will need to continue paying, but subsequently have the legal right for reimbursement for payment by the ex-spouse due to violating the divorce decree, even if bankruptcy discharges the financial responsibility. This principle holds true whether the spouse has filed to receive bankruptcy protection and regardless of whether the legal financial obligation has been discharged. The family court can still require completion of an obligation to cover creditor obligations and disallows the discharge of the obligation to repay you according to the decree.
Income Qualification For Ch 7 Bankruptcy
For those intending to file bankruptcy in Chapter 7, choosing whether to file prior or subsequent to getting a divorce may be a question of income. The requirements for a single household are lower than that income requirements for a household of 2 or more.
Additionally, there is a consideration when seeking to keep a car in a chapter 7 bankruptcy. If filing a chapter 13 bankruptcy, there is a requirement to be able to actually make the car payment and afford it. On the other hand, in a chapter 7 bankruptcy, there is not the same ability to catch up the vehicle over time.
Contact local attorneys in the DFW area for more information about your rights in a bankruptcy and of your obligations and more information about what may and may not be discharged in bankruptcy.