put lien against vehicle to keep it -Ch 7

Probably wont fly. For starters, loan would also have to be included in the bankruptcy...if your parents cosign, if will reflect on their credit. Plus you will have to explain to the court what you did with the proceeds of the loan.

You can use the vehicle as collateral and have a lien placed on it prior to filing to reduce the equity however, here are the problems:

1. REAL $$ must exchange hands.

2. The lien MUST be put on the title at the time of the transaction so you will need to deal with MVD.

3. There needs to be a properly executed promissory note showing the amount of the loan, the repayment terms and that the loan is to be secured by the vehicle.

4. You MUST spend the $$ before filing on necessities and keep a paper trail of what you did with the $$.

5. While the loan can be from an insider (parents), it would be better if you used an institutional creditor such as a credit union or finance company.

6. The lender is listed on Schedule D and your Statement of Intentions should reflect that you will reaffirm the debt. The monthly payment (assuming there is one) is to be listed on Schedule J. (Your attny already knows this.)

Des

Thank you both for your replies! Yes Des, I'm planning on using the vehicle as collateral and place a lien against it for the amount my parents LEND me. They will be in town about a week before Thanksgiving, so I can coordinate all this at that time, notarizing the forms, filing the lien with the mvd, etc. I am planning on visiting the MVD tomorrow to see exactly what they want and to pick up any forms needed.

My parents will provide me with a check at that time too. I can use those funds to help for pay my BR attorney and ahead one month on bills, can't I? I'm so fortunate to have someone to help me out and I feel so bad for the others on here who don't!

Would you suggest that I have an attorney write up the promissory note and security agreement for this? -to make sure it is done correctly? Or is this unnecessary? I'd like to not have to pay the money if I don't have to, but I've never done anything like this before so I don't want to do it incorrectly.

I'm not sure what attorney I'm going to use just yet. The first one I met was very abrupt and pushed me through his office very quickly. The second one was very young and told me if I had any funds left over before filing to spend it on furniture for my house... Why would I want to use it on anything so frivolous? Won't be using him! Anyone have any suggestions for an attorney the Phoenix area (east valley)?

I have been working so hard to cover the minimums to pay bills for the last three years and really didn't want it to come to this, but I've just about emptied all my savings and it's so draining worrying about my bills "every month" and can't continue on this way. (this is the first month I'm not going to be able to pay credit cards - and they run me $1200 a month. So even paying a $200 a month on the car lien will be huge difference in the amount of cash I have to come up with every month). I really appreciate having a forum like this to read about other people going through the similar things and to ask questions from the experts! Thank you so much!

I cannot comment on the attnys you have seen. You will use the one you feel most comfortable with. Most give free consultations so visit with several. An attny can draft the note but I think you can obtain the forms at Staples or Office Max. They are pretty standard. Use the funds for necessities (food, clothing, utitlities etc.).

Best regards.

Des.