Home | Bankruptcy


How to Keep your Car in Bankruptcy *

For most of us, a car is a necessity. Very few people can survive in an urban setting without a car in the 21st century. At the same time, most people own a car through obtaining a car loan. If you fall behind in your car loan repayments, the lender has a right to repossess the car. When you file for bankruptcy, that is what is likely to happen. The lender would demand the car back and sell it at an auction. If the proceeds of the auction is insufficient to cover the outstanding loan, the lender will initiate a lawsuit against you to recover the balance.

So is there a way to keep your car when you file for bankruptcy? Here are some things you can do.

When you file for Chapter 7 bankruptcy, you can “redeem” the car by paying the lender the value of the car and discharging the rest of the car loan in bankruptcy. On the other hand, if you file for a Chapter 13 bankruptcy, your car can also be “redeemed” if the car loan is more than 910 days old or if the loan was not used only for purchasing the loan (i.e. a rollover loan from a trade-in).

Furthermore, if you do not have enough money to pay the value of the car to the lender, you may take up a loan to do so even while in bankruptcy. This is good news if you have an upside down car loan (a situation in which the market value of the car is less than the outstanding car loan). You can file for bankruptcy and keep your car.

Another thing you can do to keep your car in bankruptcy is reaffirm your car loan with the lender. This means you confirm with the lender that despite filing for Chapter 7 bankruptcy, you will continue paying the car loan installments. And the lender agrees not to repossess your car as long as you maintain the car loan repayments during bankruptcy.

The only problem with reaffirming your car loan is that if you fall behind on your payments after your bankruptcy is discharged, the lender can still repossess the car and sue you for the balance of loan. in view of this, you should always discuss your reaffirmation agreement with a bankruptcy attorney before entering into one with your lender.

If you wish to file for bankruptcy or discuss matters about bankruptcy, call us at (813) 200-4133 for a free consultation.

Article Source: http://freelegalinformation.info

By Tampa Bay Bankruptcy Center, P.A.

© 2006 - 2016 Free Legal Information.info

Powered by Article Dashboard


Warning: Unknown: open(/home/content/55/9808155/tmp/sess_qpjsambke2dqeluuduicaqjpc2, O_RDWR) failed: No such file or directory (2) in Unknown on line 0

Warning: Unknown: Failed to write session data (files). Please verify that the current setting of session.save_path is correct () in Unknown on line 0