If I filed a Chapter 7 and have received the discharge saying that all of my debts have been discharged, does that include my auto loan?

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If I filed a Chapter 7 and have received the discharge saying that all of my debts have been discharged, does that include my auto loan?

When I filed I didn’t have a lawyer handle my paperwork. I only could afford someone who prepared bankruptcies. After we got the discharge paper we had contacted the bank to see what was going on and they said that we would either have to surrender the vehicle or continue to make payments. However when I went to make a payment the teller said that my account was closed. Do I have to continue to make payments and, if so, am I getting credit for it? I still owe $7500.

Asked on February 6, 2012 under Bankruptcy Law, New York

Answers:

Michael Duffy / Duffy Law, LLC

Answered 9 years ago | Contributor

Whether or not the auto loan was discharged would depend on how it was handled in the bankruptcy. For a secured loan such as a car loan, the lender can offer the option of "reaffirming" the debt, where the debt and debtor's obligation survive the bankruptcy. If the debtor agrees, payments would continue and the debtor would keep the property. However, if the debtor failed to make payments in the future, there would be no possiblity of bankruptcy protection until eight years after the previous Chapter 7 discharge.

In your case, as you did not have a lawyer to guide you, the car debt was probably simply included in the bankruptcy and the debt was discharged. Depending on the car's value it might be subject to an exemption, but again, that's something that you would have had to determined prior to the discharge.


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