Will I be able to Keep my Car if I File Bankruptcy!?
People often ask “Will I be able to keep my car or cars if I file bankruptcy?” In almost every case, the answer is – Yes! Ultimately, you get to keep your car during and after your case is closed. Even if you are behind on payments, you may be able to retain possession of your car through exemptions offered. The outcome of your case may depend on which chapter you file – Chapter 7 or Chapter 13.
In either case, you should understand measures that can protect your car, so you can keep your car or cars. When you file for protection the automatic stay goes into effect. The automatic stay protects personal property, such as vehicles, from being repossessed by creditors. Moreover, there are exemptions that may protect your car from being sold even if your vehicle is paid off in full.
Chapter 7 Bankruptcy and My Car?
In Chapter 7, you have the option of reaffirming the loan agreement on the vehicle (settling on a payment arrangement you promise to stick with to prevent repossession). You have the option of redeeming the vehicle by making a lump sum payment based on what the car is worth and having the remaining balanced owed discharged. You can surrender the car if you can’t afford the payments, or if you want to walk away from it. Lastly, you can continue making voluntary payments on the car loan and you can keep your car.
Chapter 13 Bankruptcy and My Car?
Chapter 13 may help you get a reduced loan balance if you still making payments on your car. Depending on the value of your car and what you owe on it, you may be able to reduce the principal balance with a lower interest rate (cram down). You may also use this chapter to get caught up on defaulted payments.
Contact JPPLAW, 570-822-5771, now to learn the truth about bankruptcy and how it might (or might not) impact your car!