Question - I've Heard Two Thing

Question:
Currently because my ex-husband declared bankruptcy, this means I'm now responsible for any of the bills that we had together but he promised to pay in the divorce decree. Because I took on my share of the bills when we were divorced, I am unable to. After being passed around to several lawyers, I was told my only option is to file bankruptcy myself. This isn't something I wanted to do at all, and I've really agonized over it, but I don't have a choice. I can't afford to pay those items he ran up balances on. I tried to get those accounts closed when we were going through divorce, but I was told I could not, therefore he ran up huge balances and filed for bankruptcy. My question is, my only real asset is my car. I have no house, my computer is quite old and not worth anything. Will they take my car away? It's worth $6200 now, but I still owe $9400 on it. I've heard, yes they will, and I've heard, no as long as I keep paying on it. I'd like to reaffirm that debt once I file and keep the car, I've kept it in good shape, and don't want to lose it due to circumstances beyond my control. I'm perfectly willing to keep up with the payments on it. Is this possible?

Answer:
If it's worth $6200 (NADA Blue Book value) and you have a $9400 payoff on it, you've got $3200 of negative equity in the vehicle, and there's no way that the trustee or the bankruptcy court would "take" the vehicle from you, because you would have to have equity in it for it to be worth anything to the trustee and the court (if you had equity in the vehicle, they'd sell it to distribute the proceeds of said sale to creditors). My wife and I were in a similar situation when we declared BK about a year ago... we had a car worth $2000 tops, on which we owed about $2800... thus, negative equity. We reaffirmed the debt for the few remaining payments, and paid it off about the same time that we received our discharge. I remember reading that in certain cases (Chapter 13 BK only, I think) the bankruptcy court will modify the reaffirmed secured debt (on the automobile) so that the debtor owes only what the vehicle is actually worth at the time that the repayment plan is worked out (thus getting you out of being "upside down" on the loan). This wouldn't apply to you, as you're seeking Ch7 debt relief. Since you have negative equity in the car: In a Chapter 7, you will be able to keep it as long as you are current and keep current. In a Chapter 13, I believe you can write-off the negative equity but again, you would be able to keep the car. If I'm wrong, I appologize.





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