Keep Your Car When Filing For Bankruptcy
Having access to an automobile is important to many people. Getting to work, completing errands or going anywhere outside of your immediate vicinity requires access to some sort of transportation. It is not a surprise, then, that one of the first questions people ask when they consider bankruptcy is, "Can I keep my car?"
The answer to that question may vary depending on your circumstances. However, in most cases, the answer is yes. Whether or not the vehicle is financed, it is rare that someone loses his or her vehicle in bankruptcy. But you can choose to be done with a vehicle (and the payment that goes with it) if that is your desire.
At Vail A. Kaufman, P.A., with offices in Greenbelt and Columbia, Maryland, our attorneys help indebted individuals and families throughout Prince George's County and the Maryland suburbs. Using the tools of Chapter 7 and Chapter 13 bankruptcy, we help them to eliminate debts and prepare for futures free of impossible financial obligations, including auto loans.
Can I Keep My Car? Should I Keep My Car? We Can Help You Make The Right Decision.
If you file for bankruptcy, you will likely have a choice of keeping your car or letting it go back to the bank. Under normal circumstances, a person who relinquishes a vehicle to repossession may be required to repay the lender a "deficiency balance" equal to the difference between the amount owed and the amount recouped through resale.
This deficiency balance can be discharged through a Chapter 7 bankruptcy. While you might surrender your car, you at least will not owe additional money on the loan.
However, if you can continue to pay on your auto loan after filing for bankruptcy, you may wish to consider entering a reaffirmation agreement with your lender. The benefit of a reaffirmation is you may continue to use the vehicle and make payments on it, hopefully in a better financial position than before. The drawback is that if you default on your loan at any time after your bankruptcy is completed, you could still face repossession and payment of a deficiency balance.
Under a Chapter 13 bankruptcy filing, it is also possible to "cram down" the amount you owe on your car loan to its market value. This can reduce the amount remaining on your loan by hundreds or even thousands of dollars.
Given these options, the choice really comes down to your ability to continue making payments versus your desire to avoid future debt. The vehicle's value, your income, and your other financial obligations should all be considered before filing for bankruptcy or signing a reaffirmation agreement.
Get Relief From Late Car Payments. Call Us Today.
Fortunately, at Vail A. Kaufman, P.A., our experienced Greenbelt auto loan and bankruptcy lawyers are ready to help. Contact us online or call 301-513-0500. We can discuss your concerns in a free, no-obligation consultation. We will advise you candidly and honestly.
If you decide bankruptcy is right for you, we can help you to eliminate your debts and keep the possessions that are important to you, whether or not those possessions include a motor vehicle.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Call (301) 513-0500 or Email Today.
