People love freedom, and one of the first times you truly experience freedom is when you get your first car. Whether your car means freedom or simply gets you from point A to point B, it is necessary for most of us to be able to earn a living. Many of us find ourselves in debt and are forced to consider bankruptcy, but often one of the first questions is, what will happen to my car? Ultimately bankruptcy is designed to help you, not cripple you. Don’t worry, I’ll review your case and make sure that you are able to move forward with your life.
Your Car
What happens to your car depends on the value of your car and how much you owe on it. The court will need to gather this information as it determines if it is within your budget to keep it. Perhaps, it may be time for a less expensive model.
If you own your car outright, the court will need to look at the value to determine if you qualify for an exemption. If you do qualify, that would allow you to keep it. The exemption is a set amount and if your car is worth less than the exemption, it is safe. On the other hand, if it is worth much more than the exemption allows, you may need to pay the difference in order to keep it. If you are unable to pay the difference, you do have the option of surrendering the car, and the trustee would then sell it and use the money to pay back your creditors.
If you have financed your vehicle, you can make the decision if it is in your best interest to keep it or give it back to the bank. Either way, we will inform the court of your decision by submitting a “Statement of Intention.” There are a couple important facts to consider: Are you current on your payment? Is your payment one that you can afford? I will take a look at your budget and help you come to a decision that is best for you.
There are a couple important facts to consider: Are you current on your payment? Is your payment one that you can afford? I will take a look at your budget and help you come to a decision that is best for you.
Making a New Start
If you and your car have a special bond, it is the best option for you to keep it. You will need to make sure you keep current on your payments and insurance throughout the bankruptcy process. Many people have a hard time securing a loan directly after a bankruptcy in an attempt to rebuild your credit. The good news of keeping your payments is, you will be rebuilding your credit. You will also be keeping your car.
If your payments are a little high, it may be possible to sign a reaffirmation agreement. This will allow you to renegotiate a new loan and interest rates. The court will take a look at the agreement to make sure it is in your best interest and if it is not, the court may reject it.
Here to Help
Bankruptcy is a big step in a person’s life and can be quite scary. I will help you sort through all the options and make sure you’re making the best choices for a new start.