As long as she keeps making the payments, the car loan will "ride through" the Ch 7 process.
Good luck to her.
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You mother should be okay to file for a Chapter 7 Bankruptcy. However, she MUST list the new vehicle. She would indicate on the BK paperwork whether or not she wishes to keep the vehicle.
She has the right to either surrender the vehicle OR keep the vehicle and reaffirm the debt.
If she opted to keep the vehicle, the financing company would send her BK attorneys paperwork related to the reaffirmation of the debt. She would then fill this paperwork out and submit it back to the vehicle financing company and they would file it with the court. As long as she is current on her payments (and stays current) AND she can demonstrate to the Trustee and the BK court that she can afford to pay for the vehicle, she should be allowed to keep the vehicle. The rest of the BK should proceed smoothly (being as she has primarily unsecured debt).
Best of luck to you.
The car will be included in the bankruptcy. I am assuming the car has litte or no equity. Your mother can keep the car so long as she reaffirms the car loan. This is done by way of an agreement with the lender. Most lenders are willing to cooprate with a reaffirmation.
Depends on the equity value of the car and CA exemptions (protections) whether or not the trustee will take the car. Probably not. Also, with or without a BK, as long as the payments are being made, she can keep the car. But, DON'T let her sign a reaffirmation agreement. Good luck.
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Bankruptcy is an all or nothing proposition. You have to list everything you own and everyone you owe money to. You cannot pick and choose. The car should be listed on Sch B and the debt associated with the car on Sch D and if it has equity exempt it on Sch C, also list your intent with regards to whether you want to surrender, redeem, or reaffirm the car.
No problem here with the recently purchased car, as far as your description of facts reveal.
Probably wise to seek help of an experienced attorney in at least preparing her bankruptcy case, if not also continuing on to represent her in talks with the auto lender and possible reaffirmation agreement.
Best of luck!
Michael Salanick, Esq.
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