Bankruptcy can be a complicated and daunting process but if you’re struggling with debt it may be the best option for you. If you’re considering bankruptcy one of the first questions you probably have is “Can I keep my car?”
The answer is maybe. It all depends on the type of bankruptcy you file and the value of your car.
If you file for Chapter 7 bankruptcy also known as a straight or liquidation bankruptcy the court will appoint a trustee to sell your assets and use the proceeds to pay off your creditors. Most people who file for Chapter 7 bankruptcy are able to keep their homes and cars but it depends on the value of the assets and the state you live in.
If your car is worth less than the amount you owe on it you may be able to keep it. This is because the trustee will abandon or give up any property that is worth less than the amount of the debt.
If your car is worth more than the amount you owe on it you may be able to keep it by reaffirming the debt. Reaffirming the debt means that you agree to continue to make payments on the loan and the lender agrees not to repossess the car.
If you file for Chapter 13 bankruptcy also known as a reorganization bankruptcy you will not have to give up any of your property. This is because in Chapter 13 bankruptcy you propose a repayment plan to the court that includes a payment schedule for all of your debts. As long as you make your payments on time you will be able to keep all of your property including your car.
The process of filing for bankruptcy can be complicated so it’s important to seek the advice of an experienced bankruptcy attorney. An attorney can help you determine which type of bankruptcy is right for you and guide you through the entire process.
How can I keep my car when filing for bankruptcy?
Answer 1: There are a few ways to keep your car when filing for bankruptcy.
You can reaffirm the debt redeem the collateral or put the car on a payment plan.
What is a reaffirmation agreement?
Answer 2: A reaffirmation agreement is a new contract between the debtor and the creditor that reaffirms the debtor’s obligations to pay the debt.
What is redemption?
Answer 3: Redemption is when the debtor pays the creditor the retail value of the collateral.
What is a payment plan?
Answer 4: A payment plan is an agreement between the debtor and the creditor to pay the debt in installments over time.
How do I file for bankruptcy?
Answer 5: You can file for bankruptcy by yourself or with the help of an attorney.
How much does it cost to file for bankruptcy?
Answer 6: It costs $306 to file a Chapter 7 bankruptcy and $281 to file a Chapter 13 bankruptcy.
How long does bankruptcy stay on my credit report?
Answer 7: Bankruptcy can stay on your credit report for up to 10 years.
What are the different types of bankruptcy?
Answer 8: The two types of bankruptcy are Chapter 7 and Chapter 13.
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Answer 9: Chapter 7 bankruptcy is for people who cannot afford to repay their debts.
Chapter 13 bankruptcy is for people who have a regular income and can repay their debts over time.
What are the requirements for filing for Chapter 7 bankruptcy?
Answer 10: The requirements for filing for Chapter 7 bankruptcy are that you must pass the means test and that your unsecured debts must be less than $394725 and your secured debts must be less than $1184200.
What are the requirements for filing for Chapter 13 bankruptcy?
Answer 11: The requirements for filing for Chapter 13 bankruptcy are that you must have a regular income and that your unsecured debts must be less than $394725 and your secured debts must be less than $1184200.
What is the means test?
Answer 12: The means test is a test that determines whether you can afford to repay your debts.
What is a discharge?
Answer 13: A discharge is a court order that releases the debtor from the obligation to repay certain debts.
What debts cannot be discharged in bankruptcy?
Answer 14: Some debts that cannot be discharged in bankruptcy are student loans child support alimony and most taxes.
What are the consequences of not paying my debts?
Answer 15: The consequences of not paying your debts can include wage garnishment asset seizure and collection calls.