Should I file bankruptcy on an upside down auto loan?

You tell us about a bad car loan (albeit a normal high interest one for someone with poor credit) - you did not tell us why a Bankruptcy is necessary or even a reasonable possibility. A bankruptcy is not a "get out of a bad deal" card to pull out. Is he employed? Can he make the payments? If so, that is the answer - he honors his responsibilities, builds his credit, and you don't have to bail him out. Check the contract again to see if it can be paid off early without penalty, and see how fast he can pay it off, be debt free and have a better credit score.

There are many factors that need to be considered before filing a petition for relief under the bankruptcy code and there is no way that you could give us enough information in this forum to know whether bankruptcy would be in your husband's best interest or which chapter would benefit him the most. Some of the factors that need to be considered are: 1) total amount of unsecured debt such as credit card debt, medical bills, personal loans, old utility bills, etc.; 2) total amount of secured debt such as auto loans, house mortgages and loans that have other items as collateral; 3) for loans made to purchase autos and other personal property in which the collateral are the purchased items, did you purchase the auto more or less than 2.5 years ago or did your purchase other personal property more or less than one year ago; 4) what is the interest rate on you secured loans and would a reduction to around 5.0% help you significantly; 5) for the tax debt is the debt dischargeable in a chapter 7 or chapter 13, and if not, would discharging the penalties in a chapter 13 and stopping the interest from running on the tax be a significant savings; 6) your projected income and expenses and you means test income and expenses, which considers your average income over the past 6 months; 7) what assets do you own that are exempt and what assets that you own that are not exempt; 8) is your income subject to being garnished by a judgment creditor if you decide not to file; and 9) your current credit score, which if it is already extremely low now, your score could be helped by filing and doing the right things to rebuild your credit after entry of the discharge order in your case. The best way to answer your question is to take advantage of a free initial consultation with an experienced bankruptcy attorney that handles chapter 7 and chapter 13 cases even if you think you need to file under chapter 7. Become educated on all the issues involved and related to your current economic situation, find out the advantages and disadvantages for filing under each chapter and use an attorney that can help you make the right decision for you. Most bankruptcy attorneys will meet with you at no charge for the initial appointment. You can use the "Find a Lawyer" link at the top of this page to search for an attorney.

I agree with Attorney Gambrell. The only thing I would add is that everyone's situation is unique and about every bankruptcy attorney in your area offers a free consultation. Do yourself a favor and sit down with one or two and get your questions answered.

When making this decision, ask the attorney you consult about redemption funding. This may allow the car to be refinanced at its current value, and your guy can skill keep his wheels. Hope this perspective helps.

Bankruptcy has serious consequences and should only be filed after careful consideration. If three or more of the following apply, your significant other should meet with a local bankruptcy attorney, who you can find on , to discuss filing bankruptcy: 1. Collections agencies are calling you 2. Credit card debts over $5,000.00 3. More than two unpaid medical bills 4. A foreclosure or other lawsuit is filed against you 5. You are getting threats of a foreclosure or your mortgage company returned payment to you 6. You have been given a notice of sheriff's sale 7. Your car or other property has been repossessed 8. Payments are more than one month behind on more than one bill 9. Your mortgage/rent is late or behind 10. You use cash advances/check cashing services 11. You buy necessary items on credit 12. You are late on payments and are 'Robbing Peter to pay Paul' 13. Your balances are not getting down even though you make payments 14. Facing or threatened with wage attachment or bank garnishment 15. Facing or threatened with utility shut-off 16. You owe income taxes or other taxes

Yes, bankruptcy is a very real option. As the other attorneys mentioned, it is not a decision to be taken lightly. Whether he should or not depends on his whole financial situation. Call a lawyer now for a free consultation.

Bankruptcy is an option, but given the facts you included, as pointed out already in earlier answers, some thought needs to go into his decision. Also, there may be several different approaches to consider. The scope of this space does not afford an opportunity to assess the situation and advise you. I recommend you assemble for legal consultation: (1) household income information for May 2015 through the present, including wages and unemployment during that period; (2) all your bills and collection notices (copies neatly assembled, back pages included); (3) last two years’ tax returns; (4) a credit report (use www.annualcreditreport.com to obtain free report if not requested in last year); and (5) other information that may apply, such as copies of lawsuits. Call at your earliest convenience to afford the most opportunity in which to be advised about your best course. I do not recommend filing bankruptcy on your own. There are too many complex issues. I have seen several posts on this site for debtors who filed on their own and are seeking counsel concerning complications. Most of them will have a hard time finding an attorney to get involved to unwind the mess without the attorney charging several times what would originally have been paid.

I believe that bankruptcy provides a lot of help and allows people to get their credit fixed quicker than just having the open debts on their credit. if you are renting an apartment and the household income satisfies the "means test" for your jurisdiction, then i recommend that you hire an attorney near you and that your Husband file for bankruptcy relief.