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What is the difference between a bankruptcy and a bankruptcy with a repossession on your future credit ratings and loan possibilities?
Wiki User
∙ 19y ago
I would say the difference between a bankruptcy and a bankruptcy with a repo is not great enough for a person to keep a car they cannot afford just to maintain a slightly higher credit score. This is especially true in light of the fact that one's credit score will improve in 12 to 36 months after bankruptcy anyway, and especially in light of the fact that a reaffirmed car that one later defaults on after bankruptcy will hurt one's credit score again down the road AND potentially leave the person owing money after the car is repossessed and sold. But, this is admittedly very subjective. The bankruptcy itself will reduce your credit score by 75 to 150 points (depending on the circumstances of the case, circumstances the credit reporting agencies won't release since how they determine your score is a big secret), and I don't know how much a repo lowers your score. Certainly your credit score will remain a little higher if there is not a repo involved as well. But, if the question could be re-stated to say "Should I reaffirm (keep) my car in my bankruptcy case so my credit score doesn't drop so much?" then I would say this is highly dependent on whether one can afford the car. If one can afford the car and wants to keep it (and keeping it won't cause an undue hardship on the debtor or the debtor's family), then go ahead and keep it and the credit score won't suffer so much. If however one can't afford the car or is struggling to make payments, then keeping it just to protect a credit score that will improve over time anyway isn't worth it. And, if one reaffirms a car and then defaults down the road, that person lost their bankruptcy protection on the car and will probably get sued. I heard a trustee say (at a 341 meeting) that filing bankruptcy and keeping debts you can't afford is like taking a shower with a raincoat on, it accomplishes nothing. I think this is pretty sage advice the trustee gave. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
Wiki User
∙ 19y ago
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What is the difference between debt settlement vs bankruptcy?
There is a subtle difference between debt settlement and bankruptcy. Debt settlement allows a person to pay off some of their debt with their creditors. Bankruptcy claims do not result in payment of the debt. Either practice creates bad credit scores for the consumer.
What is the difference between a foreclosure and a repossession?
They are virtually the same since you don't own that thing any more and they both badly affect your credit. The major difference is that with repossession your "thing/s" are taken away or repossessed by the original owner. With a house in foreclosure you have to leave/move away.
What is the difference between chapter 11 vs chapter 7 bankruptcy?
The major difference between Chapter 11 bankruptcy and Chapter 7 bankruptcy is that Chapter 11 offers more flexibility so that debtors can negotiate terms without having to sell their assets. Under Chapter 7 bankruptcy, the debtor's assets are almost always sold to pay off their debt. Chapter 7 also features a level of debt forgiveness, whereas Chapter 11 does not.
What is the bankruptcy differences?
The difference between the types of bankruptcies have mainly to do with whether the filing is for an individual or a business. There are two types of bankruptcy for individuals. Those are Chapter 7-by far the most commonly filed form of bankruptcy and Chapter 13-which is more of a debt consolidation type of bankruptcy. Both have various positives and negatives. The article below goes into the specifics of Chapter 7 vs Chapter 13.
What is an unsecured loan used for?
The difference between an unsecured loan and a secured loan is very big if for some reason bankruptcy is declared or the loan cannot pay repaid. Secured means that the buyer still needs to repay and unsecured mean he doesn't if bankruptcy is declared.
In bankruptcy what is the difference between release forms and discharge forms?
what is the difference between release forms and discharge forms in bankruptcy law..
What are the key differences in bankruptcy laws between Florida and California?
Bankruptcy laws are federal so there is probably no difference in bankruptcy laws between Florida and California.
What is the difference between debt settlement vs bankruptcy?
There is a subtle difference between debt settlement and bankruptcy. Debt settlement allows a person to pay off some of their debt with their creditors. Bankruptcy claims do not result in payment of the debt. Either practice creates bad credit scores for the consumer.
Can they repocess a car if you file bankruptcy?
Bankruptcy filing does not stop a car repossession. The contract you entered into most likely gives the lender the right to reclaim possession of the vehicle if you default on the terms. Depending on the bankruptcy chapter (7 or 13), you may either a) Have to pay the deficit over time, chapter 13 or b) have the deficit forgiven, chapter 7. The deficit is the difference between what you owe (+ repossession and disposition fees) on the vehicle and what it brought at auction. The lender is required to get maximum value for the car at sale. Genrally, courts have held that wholesale value satisfies this requirement. Therefore, the deficit is likely to be quite large.
What is the difference between a chapter 11 bankruptcy voluntary dismissal and a chapter 11 bankruptcy dismissal via consent order?
There really isn't much difference in these cases. The difference is just one of how they were filed. Both are voluntary dismissals.
What is the difference between a company going bankrupt and getting bankruptcy protection?
One and the same...going bankrupt means they have legally asked for protection under the bankruptcy laws.
What is the difference between a foreclosure and a repossession?
They are virtually the same since you don't own that thing any more and they both badly affect your credit. The major difference is that with repossession your "thing/s" are taken away or repossessed by the original owner. With a house in foreclosure you have to leave/move away.
What are the difference between Chapter 7 vs Chapter 11?
The difference between Chapter 7 bankruptcy and Chapter 11 bankruptcy is what happens to a party during the process. Parties undergoing chapter 7 bankruptcy must sell of their assets in an attempt to pay off dept. Chapter 11 allows for one to attempt to maintain their assets. During chapter 11 bankruptcy the party must negotiate with creditors to stay afloat.
What is the difference between voluntary repossession and regular repossession and the pros and cons with it?
Neither are good. Call the lender and work something out. a repo is a repo by any standard ,they will sell the unit and go after you for the deficiency no matter what.it will be on your credit as a repo. You will not have to pay the towing and fees associated with the repo. That is the only difference.
What is the difference between repossession and bankrupcty and which one is worse?
For any personal credit related concerns I recomment a website that I know has many very good answers to even the toughest questions. It is an 'ask' site directly on Experian's website which is hosted by Maxine Sweet, the V.P. of Public Affairs for Experian. You can get to the site from the following link: http://www.experian.com/ask_max/index.html A repossession is the term applied to action taken on a defaulted vehicle loan. The vehicle, which is the security of such a loan, is either involuntarily repossessed (taken), or voluntarily turned in. Repossession is simply a word. The derogatory credit issue is the fact that repossession only ever follows default of a loan. A bankruptcy is a legal action with its' own set of ramifications and consequences. Consumers file bankruptcy when they are unable to repay debts. As such, it is serious and can impact their credit for up to 10 years from the date of discharge. Because bankruptcy is a legal action, it appears in the "public records" portion of a consumer's credir report. It requires a disposition, either a discharge or an order to vacate (dismissal). Consumers with ANY legal item in the public records portion of their credit (bankruptcy, tax liens, foreclosures and judgments) take larger deductions to their credit scores for all adverse activity during the reporting period. Therefore, a bankruptcy is considered "worse" on a consumers credit than a repossession.
What is the difference between chapter 11 vs chapter 7 bankruptcy?
The major difference between Chapter 11 bankruptcy and Chapter 7 bankruptcy is that Chapter 11 offers more flexibility so that debtors can negotiate terms without having to sell their assets. Under Chapter 7 bankruptcy, the debtor's assets are almost always sold to pay off their debt. Chapter 7 also features a level of debt forgiveness, whereas Chapter 11 does not.
What is chapter 13 bankrupt?
There is a big difference between chapter 7 and chapter 13 bankruptcy. Generally speaking, chapter 13 bankruptcy is a type of Reorganization bankruptcy. It filing a plan with the bankruptcy court suggesting how you will repay your debt. Some debts must be repaid in full while others require only a percentage or nothing at all.
