What Happens To My Car?
One of the first questions that individuals considering filing for bankruptcy is if they’ll get to keep their vehicle. In most cases, yes. Courts consider a vehicle a necessary asset to get to and from work, the grocery store, medical appointments, and other critical business. However, there are some nuances to be aware of when filing for a Chapter 13 bankruptcy and how it may impact your vehicle.
What Is a Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy does not liquidate your assets to pay back all or a portion of your debt as is done with a Chapter 7. Instead, you are allowed to maintain ownership of your assets and are put on a 3 to 5 year repayment plan determined by the court after evaluating your disposable income. Once the repayment plan has been completed, any left over debt is usually discharged.
What Happens to Your Car Under a Chapter 13 Bankruptcy
When you file for bankruptcy, the court issues what is called an “automatic stay.” What this does is essentially serves as a cease and desist order to all of your creditors. They can no longer pursue collections against you during this period of time, which may buy you some time to get caught back up on your car payments.
If the amount you owe on the vehicle is greater than the actual value of the car, a Chapter 13 bankruptcy allows you to restructure your loan to lower the amount you owe to the value of the vehicle attached to the loan. The rest of the debt is added to non-priority unsecured debt, which is the last on the list to be paid by a bankruptcy trustee. If your repayment plan is up before your payments begin to make a dent in your non-priority unsecured debt, this amount will usually be discharged.
Should You Contact a Bankruptcy Attorney?
If you’re struggling with financial debt and are having a difficult time getting control over your funds, a bankruptcy attorney can help. The idea that filing bankruptcy is always a bad move is antiquated, and today’s bankruptcy solutions can help you start off with a clean financial slate and get your credit back on track.
Get Help Today
Contact Caplan Bankruptcy today for a consultation at (407) 872-6249. We can help you get out from under the mountain of crushing debt and back on your feet with a clean financial slate. Call now!