Keeping your car while going through bankruptcy.
We can all agree that a car is a very valuable asset. You need it to get to work, buy groceries and manage your everyday life. We understand that keeping your car during bankruptcy is a priority. Whether you are going to be able to keep your car during Chapter 7 depends on a few things, where you live and how much you owe on your vehicle.
Chapter 7, by no means, is intended to deprive you of all your property. Since most people need a vehicle to get to work and manage their lives, most laws allow you for a certain amount for a car regardless of where you live. Just make sure you are current on your payments while going through bankruptcy.
How to keep your car during chapter 7?
If you take out a loan to purchase your car, then the lender would have a vested interest in your vehicle. If you don’t make payments on your car, the lender can repossess it. In most cases, bankruptcy does not change the security interest. The trustee in this situation is only concerned with the amount of equity you have built up in the car. The equity is the value of your vehicle less than the balance owed.
If you are going to continue making your regular car payments, the lender may require you to reaffirm your car loan in order to keep it. A chapter 7 discharge eliminates your personal liability on the loan of the car. This means that if you don’t make your payments, the lender can still repossess your vehicle and sell it but cannot sue you for any deficiency if the proceeds of the sale were not enough to pay off the entire loan.
If you find yourself getting into trouble with your credit card debt, contact Castle Law Office to help you with your Chapter 7 Bankruptcy options. Call us today at 816-842-6200 to speak with an attorney. Or, you can email us and schedule your free consultation.