Can i file bankruptcy and keep my car
Introduction:
To make the problems of lack of money even more complex, there are those who fail and thus need to file bankruptcy to get back in control of their financial situation Concerning my emotions I do feel tension since I may lose my car, which are significant assets.
While there can be hope in the United States as there are options to help people keep their vehicles and file for bankruptcy, this situation might not be as positive in other countries where the same options are not available. In this guide,
we’ll start with a look at the step-by-step process of filing for bankruptcy and continue with a discussion of tactics to keep your car.
Understanding Bankruptcy:
Bankruptcy filing can be categorized as the legal procedure under which person or a business seek remission of unmanageable debts they are unable to repay. The US is a federal state of which bankruptcy laws are substantially governed by federal law and as a result individual states may enact their own provisions. Generally speaking, there are several types of bankruptcy filings with the most commonly ones by an individual would fall in between Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy:
The liquidation process, or liquidation bankruptcy (Chapter 7), involves selling off non-exempt assets in order to pay off creditors. But most states provide exemptions when somebody can save certain commodities for example, their cars, up to certain worth. These concessions get states to reflect their statutes, but they hold the same ideas about the necessity of a car used for work transportation.
Chapter 13 Bankruptcy:
Chapter 13 bankruptcy, commonly known as a debt repayment plan that is created to settle debts within that period usually between 3-5 years. In contrast to the Chapter 7 filing that stipulates liquidation of the assets, Chapter 13 restructures debts without sale of assets by order of priority. Not only that, they have the chance to continue possessing their property but with an opportunity of structured payments for creditors.
Strategies to Keep Your Car:
Utilize Exemptions: One of the most important things is to comprehend the regulations in your area. It is a common practice among the states to develop exemptions that make the vehicles with market value below a defined maximum exempt. In this case you may take advantage of the exemptions existing in the bankruptcy system which allow you to keep ownership of your vehicle throughout the proceedings.
Reaffirmation Agreement: They could be given the opportunity to go into a Chapter 7 bankruptcy and become members of a reaffirmation agreement with the lender. Under this contract you can make regular payments outside of your bankruptcy discharge to pay your car debt. You can use the debt reaffirmation to keep the car ownership provided that you haven’t fallen behind on your lease payment. By keeping the vehicle, you can save money on the monthly rentals.
Redemption: The next alternative in Chapter 7 is redemption and paying the very actual value of the car rather than the originally agreed loan amount. In such a case, the opportunity to ownership can be beneficial only in case the value of your vehicle is much more than the amount you are liable to. Unlike a car loan, which forces you to make regular installments for a predetermined period, a car loan allows you to keep and drive the car just as it was before removing the burden of the original loan.
Chapter 13 Repayment Plan: Consider Chapter 13 bankruptcy if you want to include your car loan in the repayment plan and have there funding for the repayment. This will also give you the leeway to catch up on skipped payments and pay off this car loan over the agreement period of the plan as you manage your money effectively.
Negotiate with Lender: Depending on the status of the current loan, the lender may be willing to adjust the terms, reduce the principal or extend the maturity date in order to allow you to keep your car. Try these alternatives before and during the bankruptcy process. During the bankruptcy process they can also be very beneficial.
Conclusion:
Car filing for bankruptcy can be a taxing and discouraging process, but the car is not an automatic asset to be seized by creditors committee. Through A recognition of what you own, attempting to get rid of all the debts that are attached to the vehicle, and using the exemptions that are available, you start out by preserving a vehicle that belongs to you. In the end, however, you need to reconcile with the financial problems.
Having a trustworthy bankruptcy lawyer at hand imposes the necessity of personalized advice that can be delivered only after a thorough examination of your case details and factors behind bankruptcy. Be aware of the fact that, however beneficial bankruptcy maybe, your goal is to prevent from meeting the same hardships again in the near future, and for that reason, it is very important to be guided by your informed decisions that should put a path leading to long-term financial stability.
