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Will surrendering my car after chapter 7 discharge negatively affect my credit in AZ?

Phoenix, AZ |

As per my attorney's advice, I didn't sign a reaffirmation agreement. I simply stated "pay and retain" and have been making my regular payments faithfully. My BK discharged a few months ago. My financial circumstances have improved, but my car's condition hasn't and I'd like to buy a new car without trading my old one in as I am upside down. Am I correct in assuming I can allow the lender to take my car and, because the debt was listed in by BK, this action cannot negatively impact my credit?

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Attorney answers 2


Look, you are already in a rebuild status due to the BK. IF there were an impact due to the lender's report of a repo on a credit report, it would still pale in comparison to the impact of the BK.

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From the facts that you stated, you should not be responsible for the loan on the car you currently own. Before you move forward, I think you should ask your lawyer to be sure you are doing everything correctly. He/she knows the facts better than anyone. I would also be cautious about taking on new debt. Any debts you take on you will be responsible for and will not be able to file another bankruptcy for years.