What Happens If My Wife Files For Bankruptcies
If most debts are owed only by one spouse, it may be appropriate for that spouse to file for bankruptcy alone. However, if one spouse does file for bankruptcy in order to discharge debts, the other spouse may be held responsible for repayment of some debts, such as jointly-owned credit card debt or medical debt.
Can I Keep My Car If I File Chapter 7 Bankruptcy In Georgia
Due to the lack of comprehensive public transportation and the distance between the suburbs and the city in the Atlanta metro area, many Atlanta residents who file bankruptcy are concerned about keeping their cars after filing bankruptcy under Chapter 7 so that they can continue to work.
The good news is that you can keep your car if you file Chapter 7 bankruptcy. If you own a car and file Chapter 7 bankruptcy you have three possible options regarding your car: you can surrender the car you can reaffirm the loan or, under certain circumstances, you can redeem the vehicle. These options are available for debtors who still have loans on their cars. Debtors who own their cars free and clear may keep their cars, as long as the cars are not worth more than the exemption for vehicles in Georgia.
Surrendering the vehicle in bankruptcy is a relatively straightforward process. You return the vehicle to the creditor, and your obligation on the loan ends, along with your ownership of the car. You may allow the creditor to pick the car up at your home or make arrangements to drop the vehicle off at the nearest location for that creditor.
If you are considering filing for bankruptcy please consult a qualified attorney. For a free consultation please contact the Law Offices of Charles Clapp at 585-0040 or email for more information.
Keeping The Car Outside Of Bankruptcy
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act eliminated drive through car loan agreements for bankruptcies. Before the act, consumers and car lenders could continue with whatever agreement they wanted, ignoring the bankruptcy. While drive-throughs are now against bankruptcy rules, it still happens and courts rarely enforce it. When no intention to reaffirm, redeem or surrender the car is filed by the deadline, a car loan is dropped from the bankruptcy. In many cases, the car owner and lender continue to do business and always, and courts rarely enforce it. Of course, this only works for the car owner if theyre making payments on time.
Since this option is counter to bankruptcy law, its not necessarily something youd want to pursue, and it provides a lot less protection than going with one of the routes allowed by law.
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How To Keep Your Car When Filing For Bankruptcy
It is definitely possible to keep your car when you file for bankruptcy. If you need help with your bankruptcy, you can count on DoNotPay to help you do it right.
In these unprecedented times, many of us will find ourselves buried in debt and there is no clear path to how to resolve it all. For many people, it is just a matter of time before they are back on top. Others will need to file for bankruptcy and receive a fresh financial start to get themselves in a position to move forward.
While your for some time following your bankruptcy, it too can ultimately recover from the situation in time. You might even be surprised how soon you can start to rebuild your credit following a bankruptcy proceeding.
When people imagine what bankruptcy looks like, they may picture themselves losing everything. It is true that you may have to part with some things, but you really won’t have to lose everything. In most cases, it is possible for you to keep your car. The bankruptcy courts make certain allowances for you in terms of household furnishings and other personal property as long as it is not too valuable. You will have options regarding your car, no matter what type of bankruptcy you decide is best for you.
Your Car In Chapter 13 Bankruptcy
Readers who filed for Chapter 13 bankruptcy were also very likely to keep their cars. If youre behind on your vehicle loan, you can use a Chapter 13 plan to catch up with your overdue payments , but you also have a couple of other options that dont apply to house loans. In Chapter 13, you might be able to stretch out the car payments over a longer period. Or, if the car loan is old enough, you might even be able to lower the balance on the principal and your interest rate.
I wish wed known that it would hurt us to sell a car before entering bankruptcy.
Sally, 48, Illinois
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Car Repossession And Chapter 7 Bankruptcy In Pennsylvania
The repossession of your car could be crippling, limiting your ability to work or manage daily household chores and errands. Chapter 7 can provide a remedy through an automatic stay. An automatic stay is a court injunction that goes into effect the moment you file a bankruptcy petition. This injunction stops all collection actions against you, including the repossession of your car. If your repossessed car was not sold, it must be returned to you. However, once that happens, you must cure the default within 30 days to maintain possession of your vehicle.
Another option is to redeem the car by paying the fair market value in a lump sum within 30 days after filing for bankruptcy. The fair market value is usually the blue book value. Some financial institutions offer redemption loans for this purpose.
There are multiple options related to your car when you file for bankruptcy under Chapter 7. You can either exclude the car if you can meet the exemption requirements or seek on the following three options:
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How Chapter 13 Works
Under Chapter 13 bankruptcy, you, your creditors, and the court will collaborate to work out a payment plan. The process is somewhat complicated, but youll generally be able to continue to make your car payments. If you have arrearages on your auto loan, youll be able to make those up through your plan payments, too. Chapter 13 debtors usually pay off their cars over the course of the plan.
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How Long After Filing Will The Creditors Stop Calling
Once a creditor or bill collector becomes aware of the filing of a bankruptcy protection, it must immediately stop all collection efforts. After you file the bankruptcy petition, the court mails a notice to all the creditors listed in your bankruptcy schedules. This notice may take a couple of weeks. Creditors will also stop calling if you inform them that you filed the bankruptcy petition, and supply them with your case number. In some cases, you or your attorney should contact the creditor immediately upon filing the bankruptcy petition, especially if a law suit is pending. If a creditor continues to use collection tactics once informed of the bankruptcy they may be liable for court sanctions and attorney fees for this conduct.
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Keeping A Car After Filing Chapter 13 Bankruptcy On A Car Loan
If you’re behind on your payments, consider filing for Chapter 13 bankruptcy. You can pay off the vehicle balance over three to five years in a Chapter 13 repayment plan and keep the car.
But if you don’t make the payments, including catching up on any arrearages on the car loan, the lender can repossess your car in Chapter 13 bankruptcy. Learn more about your car in Chapter 13 bankruptcy.
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Can I Keep My Car If I File Chapter 13
Chapter 13 is often called reorganization bankruptcy. To help you decide if Chapter 13 bankruptcy is right for you, evaluate the total value of your debts. Generally, anyone is eligible for Chapter 13 relief if their unsecured debts are less than $419,275 and secured debts are less than $1,257,850. Chapter 13 is codified at 11 U.S.C. § 1322.
Regarding your car, Chapter 13 offers some options that may be helpful. If youre behind on your car payments, a Chapter 13 can help you catch up. Or, if you owe more on the car loan than the vehicle is worth, a Chapter 13 may give you the chance to reduce what you owe. There are some situations in which you might be prevented from keeping your car in a Chapter 13. These include:
- your car payment is very high,
- youre paying for a second vehicle that you dont need, or
- you have a lot of non-exempt car equity over and above the $12,100 wildcard exemption.
Under a Chapter 13, you will create a 3- to 5-year court-approved repayment plan wherein youll repay creditors some of your outstanding debts, often under more favorable terms. After you have completed the repayment plan, some of your unsecured debts may be discharged.
Let An Attorney Help You Keep Your Home After A Bankruptcy
The decision to declare bankruptcy often comes at an overwhelming time of your life. If youre thinking about declaring bankruptcy, the chances are that youre worried about how you can manage all your finances now and in the future.
If youre caught in a financial tailspin a professional can help you identify the right steps to take, even if youre facing the prospect of losing your home.
Contact a local bankruptcy attorney, who can help develop a personal plan to get your balance sheet back out of the red.
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Redeeming The Cars Current Replacement Value
There is a way to keep your car when you file for Chapter 7 bankruptcy even if its worth more than the exemption limit. You can pay the difference the remaining current replacement value to the lender, and own the car outright. This is called redeeming. Most people filing for bankruptcy, though, dont have the bundle of cash needed to do that. Fewer than 2% go this route.
Filing Bankruptcy When You Dont Own The Car
If you are still making payments on your car loan when you file for bankruptcy, then the equity you have in the car becomes important. Equity is what you still owe on the car subtracted from its current value. For instance, say your cars value is $9,000 and you still owe $4,000, that means you have $5,000 equity if you sold the car, youd make $5,000. The exemption in your state is $6,000. Since your equity is less than the states exemption, you keep the car. If its more, the bankruptcy trustee can sell it, putting the equity toward your unsecured debt and allowing you to buy a $6,000 car.
The longer youve owned the car and the more youve paid, the more likely it will be over the exemption limit. On the other hand, cars are not like fine wine they lose their value fast. The longer youve had it, the less its worth.
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Talk To A Bankruptcy Lawyer
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Can I File For Bankruptcy And Keep My Car
Can I File for Bankruptcy and Keep My Car?
If youre facing financial hardship, you may be anxious to know whether you will be able to keep your car if you file for bankruptcy. For many people, their car is their lifeline, and keeping it is a top concern during the bankruptcy process. Fortunately, the bankruptcy system is set up to allow debtors to keep their car as long as they meet certain criteria.
Keeping Your Car in Bankruptcy: Automatic Stays
When you file a Chapter 7 or Chapter 13 bankruptcy, an Automatic Stay goes into place. The Automatic Stay will prohibit creditors from collecting money and repossessing property. It will also stop other creditor actions like wage garnishment, foreclosure, or collection calls. The Automatic Stay should prevent a creditor from trying to repossess your vehicle.
Keeping Your Car in Bankruptcy: Asset Exemption
Alternatively, exempt assets are typically protected under bankruptcy law. These are assets with equity that does not exceed the available bankruptcy exemption. Georgia law includes a $5,000 motor vehicle exemption, for instance. This exemption applies to the vehicles equity, not to its sales price or fair market value. Vehicle equity, also known as retail replacement value or actual cash value, is linked to the vehicles year, make, mileage, and condition.
Keeping Your Car in Bankruptcy: Chapter 7 and Chapter 13 Bankruptcies
Have Additional Questions? Call Burrow & Associates Bankruptcy Attorneys
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How Much Is Your Car Worth
The value of your car is part of what determines whether you can keep it when filing Chapter 7 bankruptcy. It also helps determine your payment plan in Chapter 13. Value is not what the car was listed for when you bought it, or how much youve paid since. States have rules on how to determine a cars value. Most go by retail replacement value, though some states have other measures. Retail replacement value is often called ACV . Its determined by the year and make of the car, its mileage and its condition. Sources like Kelley Blue Book or Edmunds, which list values for cars, can be a good starting point.
What Happens To Your Car When You File For Bankruptcy
Are you thinking about filing for bankruptcy but arent sure what will happen to your vehicle? Heres what happens to your car when you file for bankruptcy.
Are you considering filing for bankruptcy? Are you worried about what can happen to your assets should the process go through? Well, youre not the only one.
Over half a million people in the U.S. filed for bankruptcy in 2020. While everyones reasons for bankruptcy vary, one thing is certain, youre probably questioning whether to not youll be able to keep your car.
A car is more than a vehicle it is a lifeline that can keep you going in the most difficult times. Make sure to keep reading to find out if youll be able to keep yours if you file for bankruptcy.
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Can I Keep My Car If I File Chapter 7 In Georgia
You can keep your car when you file for Chapter 7 bankruptcy in Georgia. The state allows you to exempt up to $5,000 for your car as long as the equity in your vehicle is less than that amount. You can also protect your car by applying any unused wildcard exemption which covers any property you own.
Wiping Out Debt In Chapter 7 Bankruptcy
Many of the debts that plague the average consumer will go away. For instance, youll be able to wipe out utility bills medical debt personal loans, such as payday loans and major credit card and department store balances.
You wont be able to get rid of everything, however. Youll remain responsible for any nondischargeable debt, such as balances on secured credit accounts commonly used by stores that sell jewelry, electronics, furniture.
Here are a few other obligations that youll remain responsible for:
- income taxes incurred during the prior three years
- domestic support obligations, such as child or spousal support, and
- student loan obligations.
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The Motor Vehicle Exemption
Pursuant to Section 522 of the US Bankruptcy Code, debtors can take an exemption in one vehicle for a total interest or value of up to $4,000. To reach a final determination of the exact amount that will be exempt, you will look at the market value of your car, commonly known as the blue book value to make the calculation. For example, you will subtract the blue book value amount to the total debt owed, and you can take an exemption up to the $4,000 allowed under the code. If the amount is within limits, your car will not be liquidated under Chapter 7. If the amount is close, an experienced Philadelphia bankruptcy lawyers can help you.
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Keeping A Car After Filing Chapter 7 Bankruptcy On A Car Loan
In Chapter 7 bankruptcy, you have two people to please before you can keep your carthe Chapter 7 bankruptcy trustee assigned to your case and the car lender. You’ll need to do different things to satisfy each of them.
The bankruptcy trustee won’t take your car if you can protect all vehicle equity with a bankruptcy exemption. So your first step would be figuring out whether you can protect your car’s equity with a motor vehicle exemption. If the motor vehicle exemption isn’t enough to cover your equity, check for a wildcard exemptionmany states let bankruptcy filers use both.
If you can protect all of the equity, you can keep the car in Chapter 7 bankruptcyat least as far as the Chapter 7 bankruptcy trustee is concerned. The car lender and the lien associated with the car loan is another matter.
To steer clear of your car lender in Chapter 7 bankruptcy, you must be current on your car loan when you file and remain current after your Chapter 7 case ends. Otherwise, the lender will use the lien rights to repossess the vehicle.
But there are other things you can do to keep a car in Chapter 7 bankruptcy when you have a car loan, such as “redeeming” the car or paying the lender its actual value. Learn about all of your car options in Chapter 7 Bankruptcy.
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