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 Posted: Fri Mar 23, 2007 7:43 am Subject: FICO and Ch 13 vs. repossession |
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My car was reposessed on Monday and I am trying to work with the bank to get it back, but they are asking for the lump sum of my balance and I'm not sure I can get that amount as quickly as they want it.
I spoke with an attorney this morning who said that I could recover my car by filing Ch. 13 bankruptcy.
So, my question is which is worse or better in the long run for my FICO score? Bankruptcy or the repossession?
I checked my credit report this week and I have several late-paying accounts and also have PDL debt, so clearing the repo is not the only challenge I have right now.
TIA
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OutofDebtin07
Joined: 20 Mar 2007
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cajunbulldog
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| Posted: Fri Mar 23, 2007 11:09 am Subject: |
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Repossession laws vary in every state. You will need to make the payments fixed under the plan if you file for chapter 13 bankruptcy. You need to consult with your attorney and see how you can qualify for the plan. It might be the suitable option in your case to get the car back. Chapter 13 will stay in your credit report for 7 years just like repossession. Both the items have the same consequences. You will have to settle with one. See the thread below for more on this subject.
http://www.debtconsolidationcare.com/virginia/about24693.html
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Johnson4485
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| Posted: Fri Mar 23, 2007 4:09 pm Subject: |
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Thanks but I've already seen that thread - I was the original poster. 
I've looked at a couple of attorney websites for VA and it appears that Chapter 13 is the one I would qualify for with my income level, plus I believe that is the one where you can keep your property since you work out payment plans to your creditors.
I'm also considering working with Langhorne who advertises on this website to help get out of my payday loan debt. At this point that is taking up 30% of each paycheck and I'm not sure when I could pay it off otherwise. Lots of options and all have their pros and cons, so I have a lot of research and thinking to do this weekend.
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OutofDebtin07
Joined: 20 Mar 2007
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| Posted: Fri Mar 23, 2007 7:31 pm Subject: |
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The repo will already be on the credit report, probably by the end of this month. If you go 13, then you will have a repo and a bankruptcy showing. Neither are good for your FICO. Where the repo would stay on for 7 years, the BK will be on it for 10.
Also, be aware that you usually have 21 days to redeem your vehicle. If you file the BK before the 21 days, the judge issues what's called a cram-down order and makes them give the car back. HOWEVER, if you wait on this and file BK after the redemption period, they car may already be sold by time you file.
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DebtCruncher
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