The vehicle is in both our names and I want to do a chapter 7 bk to be relived from that loan, if I refi her off the loan before filing , will that protect her from having the owe the rest of the loan? Will the loan be completely discharged since I will be the only “loan holder” ?
If the loan is only in your name when you file chapter 7 then, assuming you do not sign a reaffirmation agreement, your personal liability will be discharged from that loan. Your wife will not be personally liable either if you already refinanced the loan into your name only. If you do not remain current on the payments the lender will be able to repossess the vehicle and sell it to satisfy any loan balance.
The information provided herein is general information only and not legal advice. The information provided herein does not create an attorney client relationship and is not a substitute for having a consultation with an attorney. It is important to have a consultation with an attorney as the information provided in this forum is limited and cannot possibly cover all potential issues in a given situation
If you do a refi for a new loan with just your name on it then that loan would be solely your responsibility. If then you file chapter 7 bankruptcy, then you would end up discharging that auto loan in your case assuming you did not do a reaffirmation agreement. However, even if you discharge the auto loan, the vehicle lien survives bankruptcy and if you still wanted to keep the vehicle you would have to remain current on all payments. Otherwise, they would likely repo the vehicle.
On the other hand, if you signed a reaffirmation agreement, then you would be signing a post petition contract meaning the debt would not be discharged in your bankruptcy case. The reaffirmation agreement is usually the same terms that you had on the prior auto loan.
Whether you should file a chapter 7 bankruptcy and whether you should sign a reaffirmation agreement requires the guidance of a professional. I recommend you contact a bankruptcy lawyer to better assist you.
Please note: I am a licensed attorney in California. This response is intended only as general commentary. This response is not legal advice and does not create an attorney client relationship.
I agree with the above answers, however, I would urge you to meet with and to speak directly with a bankruptcy attorney prior to pursuing this course of action. There are some issues that have the possibility of resulting in big trouble for you if done for the wrong purpose, done at the wrong time and/or done wrong. You need to lay out all of your facts to the attorney and get a firm understanding of implications of what you are seeking to accomplish.
Licensed to practice in the State of Georgia only. The statements provided herein are for general informational purposes and should not be relied upon as a legal opinion or statement of the law. An attorney licensed to practice law in your locality should be consulted as to the law in your state.
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