I have a credit card with a decent balance, but enough in savings to pay it off with some room to spare, and I have an auto loan. No other debts (of any kind), aside from my two mortgages. In a Chapter 13, if I were to pay off my card before filing, then turn the car over to the lender during filing, would there be no repayment plan? Technically, there would be nothing to repay. The only reason I'm looking to file at all is because, in WA State, the 2nd lender can come after me for deficiency, and I'm trying to protect myself, as my home is worth about 60% of what I owe on it. So, I'm planning to surrender the home in the filing, then let it foreclose. *There will be an attorney involved prior to moving forward, I'm just trying to gain a better understanding before contacting one.*
Thank you all for your responses. I've actually met with 4 attorneys, at this point, each of which has given me different, conflicting information and advice regarding my situation. As a result, I've explored different options and believe I've found the most beneficial for my personal situation, and it doesn't involve any kind of BR. Again, thank you all, but no further advice on this matter is needed.
Estate Planning Attorney
You should just contact an attorney. Nearly every bankruptcy attorney out there handles chapter 7 and 13 cases on a flat fee basis and they typically regard pre-filing strategy, consultations and discussions as something that they do as part of the flat fee.
The foregoing is commentary regarding a general legal question. It is not intended to be legal advice specific to the reader's individual situation nor does it create an attorney-client relationship between the author and any reader. You are encouraged to contact a qualified attorney to discuss your legal situation.
Chapter 7 Bankruptcy Attorney
Nice try, but I would expect that the creditors will file claims asking that you repay the deficiency in the Chapter 13. A deficiency is a debt and filing Chapter 13 won't magically eliminate the debt.
Hope this perspective helps!
I suggest a chapter 7. Do not pay off the credit card, as that debt will be eliminated. You may need some pre filing planning to avoid having an asset 7. You could do an IRA for instance to protect exposed funds. Definitely talk to a local attorney BEFORE you do anything. Find one at www.nacba.org
Chapter 7 Bankruptcy Attorney
Your question raises a lot of issues. I assume the reason you are not considering a chapter 7 is that your income is too high. If you are looking at bankruptcy, do not pay off your credit cards with your savings. Regarding how a chapter 13 might play out, the second mortgage lender will likely expect repayment of some portion of any deficiency through the plan. Have you considered attempting to strip the second and keeping the house in a chapter 13? It seems that you have just enough knowledge of bankrutpcy to be dangerous to yourself. You should talk to an experienced bankruptcy lawyer in the near future.
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