Legal Question in Bankruptcy in California

bankruptcy question regarding car financing

I filed BK last year and my automobile finance company included my vehicle in the discharge when I did not include it in the BK. I did not or was offered to sign an affirmation agreement. I've been making pymts to keep the car, however it is not showing up on my credit report as paying. I would like to buy another vehicle and not sure if I can give it back to the finance company w/out them claiming it as a repo or use it as a trade in (I owe more than what it's worth). I wanted to ask what my options are? Thank you for your help!


Asked on 11/29/06, 1:53 pm

2 Answers from Attorneys
Mark Markus Law Office of Mark J. Markus

Re: bankruptcy question regarding car financing

If you did not sign and have filed a reaffirmation agreement, then you can return the vehicle without further legal obligation.

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Answered on 11/29/06, 2:00 pm
Robert F. Cohen Law Office of Robert F. Cohen

Re: bankruptcy question regarding car financing

In addition to what Mr. Markus says, you may not be able to trade in the vehicle for another one. The lender is entitled to the car's return. Perhaps you can work this out with the lender on favorable terms since you apparently don't have any equity in the vehicle.

Since the purchase agreement is no longer in force, the lender is not reporting the payments to a credit reporting agency. That's not a negative. It's just a big blank spot on the credit report. However, since it's not listed as "discharged in bankruptcy," it should be evident to a discerning individual that you are continuing to make payments.

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Answered on 11/29/06, 2:24 pm


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