Wednesday, May 15, 2024

Will I Lose My Car If I File Bankruptcy

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Can You Afford Your Car

Will I lose my car and home if I declare bankruptcy?

When you file for bankruptcy and want to keep your car, you can choose to execute a reaffirmation agreement with your lender. In general, bankruptcy wipes out your personal obligation to pay a debt. When you sign a reaffirmation agreement, you agree to continue to be obligated for the debt. With a reaffirmation agreement, you take your car out of the bankruptcy process. You continue to make your regular payments and you keep your car.

A reaffirmation agreement is a good way to keep your car through bankruptcy, but there are other factors to consider. First, a debt that you choose to reaffirm cannot be discharged in the bankruptcy. Youre stuck with it. Second, you will have to prove to the court that keeping your vehicle is not an undue burden. If the court determines that making car payments will be too difficult for you, it can deny your reaffirmation agreement. Theyll look at how much money you make and what your other obligations are. If you can maintain a minimal standard of living and still make your payments, youll be able to keep your vehicle.

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.

What If You Owe More Than Fair Market Value Or You Cant Afford The Payments

If you have a significant shortfall on your car, it may be prudent to simply surrender the car to the lender when you go bankrupt so that you are not overpaying for the vehicle. If you think your car loan or lease is too expensive, and you cant afford to keep up with your payments, you have the option of handing back the vehicle to the lender.

In either case, you must return the vehicle to lender before you file. If you do surrender the car to the secured lender, any resulting shortfall after they sell the vehicle is eliminated as part of your bankruptcy.

In rare circumstances, people sometimes offer their vehicle as collateral for a larger consolidation loan. This is slightly more complicated however a trustee can walk you through options that can help you keep the vehicle if that makes sense.

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Keeping Your Car In Chapter 7

If you are current on your auto loan payments, you will be given the option to either redeem your car, which means pay the lender a lump sum to purchase the car, or reaffirm the car, which means you will enter into a new payment agreement under similar terms to your original loan agreement. It is possible to redeem and keep your car as we discussed above if you have the funds to do this or find someone that does like the company our law firm works with, but the better chance most filers have is to seek a reaffirmation agreement with the lender. This new agreement will incorporate your missed payments, as well as future ones. You must remain current on this new agreement to keep your car.

Can I Keep My Car If I File Bankruptcy

Will I lose my car if I file bankruptcy?

Home » Frequently Asked Questions » Can I Keep My Car If I File Bankruptcy?

In most cases, individuals or families who file for Chapter 7 bankruptcy can keep their assets, including their cars. Many states, including North and South Carolina, offer exemptions for motor vehicles. This allows each adult to keep their vehicle, assuming that:

  • The equity in the vehicle is under the exemption amount.
  • They own the car outright or are current on payments.
  • They make a payment arrangement before filing for bankruptcy.

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Bankruptcy Exemption Limits And Your Car

Second, if there is no car loan, you can keep the car if it is under the allowable exemption limits for your province. Each province has different exemption limits, so you should consult a local bankruptcy trustee to more information.

In most provinces the exemption limit is around $5,000 $7,000, so if a car with no loans is worth less than that, you would be allowed to keep it. If the appraised value of the car is greater than the exemption limit,you could keep the car, but only if you pay into your bankruptcy estate the non-exempt portion.

There are other factors to consider and each case is unique, so I suggest you for a no charge initial consultation to determine your options for keeping your car if you file bankruptcy.

So Will I Lose My House In Bankruptcy

This brings us back to the original question, which is one that we get all the time. The Ontario Execution Act states that your primary residence is exempt from bankruptcy proceedings with a maximum value of $10,000. This means that you are only allowed to maintain $10,000 of equity in your home during bankruptcy. If you have more than $10,000 worth of equity, then there are ultimately two options:

Option A: Your house can be surrendered and/or sold, with the resulting funds being added to the bankruptcy estate. In this case, you would not be keeping your home, but sometimes it makes the most sense.

Option B: You can pay the difference in equity to the Trustee and keep the house. With this option, you would consider the total amount of equity you have in your home and pay that amount to the Trustee, minus $10,000, which is exempt. The Trustee adds these funds to the bankruptcy estate for distribution to your creditors in accordance with the Bankruptcy and Insolvency Act.

If you are hoping to keep your home, your Trustee will work with you to find an acceptable solution that makes sense in your situation. . It is common for people in bankruptcy to keep their homes.

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Can I Keep My Car When I File Bankruptcy

The Bankruptcy Code allows you to keep a personal vehicle as long as you are current with payments and if there is not substantial equity in the asset.

Even if you are behind with your car payments, you can file a Chapter 13 and catch up with what is owed over the life of your plan. It is important to know your rights when choosing between Chapter 7 and Chapter 13. Our attorneys will explain how you can protect your vehicle, and in some cases negotiate a lower monthly auto payment.

Do You Lose Your House If You File Chapter 7 Bankruptcy

Can I keep my car if I file for bankruptcy?

North Carolinas homestead exemption allows you to exempt $35,000 in your homes equity if you use the property as your residence. This exemption goes up to $60,000 if you are 65 or older, you owned the property with another person as tenants by the entirety or joint tenants with rights of survivorship, and the co-owner is deceased.

For the couple who own real estate in North Carolina and the deed to the property reflects that ownership as a married couple and the couple has no joint unsecured debts, they can claim the property as exempt based on Tenancy by Entirety and there is no limit on the exemption.

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Will Michigan Bankruptcy Let Me Keep My Car

One of the largest concerns individuals have when filing bankruptcy is whether they can keep their motor vehicle. We all need to get to work, school, or life. Without the benefits of proper mass transit, many of us demand on our cards. In almost all cases, whether in Chapter 7 or Chapter 13 bankruptcy, you will be able to keep you vehicle.

I Lease My Vehicle Or Am Paying A Loan For It Will I Need To Return It In A Bankruptcy

If your vehicle is leased, you will not be required to forfeit it in bankruptcy .

If your leasing or loan payments are reasonable, and if your account is in good standing with the financing company, you will be able to continue with your lease or loan arrangement and keep your vehicle.

However, you will need to assess whether your auto financing costs are affordable for you. For some consumers, high vehicle leasing costs are part of the reason they have become insolvent!

If this is the case your vehicle lease or loan payments are too high for your budget it is often best to surrender the vehicle before you file for bankruptcy. Why surrender your vehicle before you file? This is because in some cases you will still owe money to the auto financing company after you have turned in your vehicle. The same applies if you have been paying an auto loan with your vehicle as security.

You will still owe money if the current value of your vehicle has fallen below the amount you owe the financing company. In this case, the value of the returned vehicle will fall short of covering what you currently owe creating a shortfall.

If you turn in your leased or loaned vehicle, and the financing company gives you a bill for their shortfall, this debt can then be included in your bankruptcy.

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Learn More: Speak With A Licensed Insolvency Trustee

Navigating all the facts around personal vehicles and bankruptcy can be daunting particularly when researching and interpreting your provinces particular regulations. A Licensed Insolvency Trustee can help and will have the facts at hand.

Only a Licensed Insolvency Trustee can file your bankruptcy paperwork. LITs understand your situation its their job to find the best solution for both you and your creditors. Your first visit is no obligation, confidential, and free of charge. Take the first step to repairing your financial situation contact a local Licensed Insolvency Trustee today.

Can I Keep My House Or Car

Will I lose my car if I file bankruptcy?

The Law Office of David M. Serafin has assisted numerous bankruptcy filers in Denver and other areas of Colorado not only stave off foreclosure or repossession, but also save money by filing for bankruptcy.

Chapter 7

In a chapter 7 bankruptcy, known for being a quick and simple means of eliminating debt, its still very possible to keep your house or car if the value of the property is under the applicable Colorado Homestead Exemption and so long as youre current on the mortgage or car payment. And, if your vehicle is upside down in equity, you may be eligible for a Section 722 Redemption. Redemption allows you to keep the vehicle by paying only for its fair market value if you can either pay in a lump sum the value of the vehicle or obtain financing to do this.

Chapter 13

Back when property values in Denver and the rest of Colorado were much lower due to the financial crises, we could file a motion to determine secured status of a second mortgage. If your house was upside down as to the first mortgage alone, the second mortgage could be stripped off . For example, the second mortgage could be stripped off and determined to be unsecured for a house worth $400,000 with payoffs on the first two mortgages of $420,000 and $50,000, respectively. In this example, the house would be underwater as to the first mortgage alone.

Reaffirmation Agreements

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Automobile Options In Bankruptcy

Walking Away from the Car You Owe Money On. If a person wants to surrender their car rather than continue to make payments, then they simply fill out a form in the bankruptcy process that declares their intent to give up the car. Then, they turn the car over to the lender, and that clears them of the debt.

Keeping a Car You Are Still Paying For. If a person wants to keep the car and still needs to pay it off, then they must continue to pay for the car throughout the bankruptcy. However, the law provides multiple options for making this payment. First, a filer may choose to make a lump sum payment to the lender equal to the car’s current value. Second, the filer may enter into a new agreement with the lender to continue to pay off the car, often on similar terms. This is known as reaffirming the promissory note. Third, in some cases, lenders may not make the filer enter into a new agreement, and they can simply choose to keep paying on the original schedule.

Repair Your Credit Fasterif You Go Bankrupt Keeping Your Car Loan Could Help

While this article is just a quick overview of some of the ins and outs of bankruptcy, if youre thinking of going bankrupt, you have a car loan, and you want to keep your car, keeping up the car loan payments through your bankruptcy and after it will help to improve your credit. Bankruptcy is one of the worst things you can do to your credit, and it takes many years for your credit to recover. However, if you have a debt like a car loan that it is being paid as agreed and it keeps reporting on your credit report during and after your bankruptcy, this will help to rebuild your credit more quickly after the bankruptcy.

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Keeping A Vehicle That You Own Outright When You File Bankruptcy

In Ontario, you can keep any motor vehicle worth up to $7,117 when you declare bankruptcy. You can research other provincial exemption amounts across Canada here.

Most older vehicles qualify for this exemption. Your trustee will look up what is known as the black book value of your car or truck to determine whether your vehicle will be considered property in your bankruptcy or will fall under the provincial exemption limit.

If you own a car outright and the fair market value is more than the exemption limit, you can propose to buy out the realizable portion from your trustee over the period of your bankruptcy.

If for example, you have a car worth $8,517, you would have to pay your trustee $1,400. You could do this by making additional payments of $156 during a typical 9-month bankruptcy. If that monthly payment is too much, talk to our trustees about a consumer proposal.

You can keep one motor vehicle under these exemption rules. If you own more than one vehicle and would like to keep both, a consumer proposal may be a better option.

Will I Lose My House Will I Lose My Car

Will I Lose My Home and Car if I file Bankruptcy? Chesapeake VA

If you are thinking of filing for bankruptcy, you likely have some big questions about how it will affect you. For instance, Will I lose my house and car or are any of my assets exempt from bankruptcy in Alberta?. In this article, we look at the Alberta bankruptcy exemptions and put our heads together in the hope of answering your most pressing questions when it comes to bankruptcy and clarifying misconceptions about losing everything. If you want more information at the end, feel free to reach out to us at Goth & Company for further advisement.

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How Cosigner Bankruptcy Affects You

Your cosigner’s bankruptcy shouldn’t affect you much at all as long as you keep up with your payments. Sure, the cosigner has their name associated with your car loan, but after they allow you to borrow their good credit, the role of a cosigner is only secondary.

If you keep up with your loan payments, there’s no reason for your lender to have to contact your cosigner. Additionally, since a cosigner’s name is only on the loan and not the title of the vehicle, you’re not in danger of their bankruptcy trustee taking your car to liquidate it for equity in order to pay creditors.

This is why your cosigner’s bankruptcy doesn’t impact you in any significant way as long as you’re following the terms of your loan contract. However, one possibility that could arise from your cosigner filing bankruptcy is that your credit reports might list the bankruptcy.

Don’t panic. The activity on your credit report isn’t showing you in bankruptcy, just the loan. As long as you’re making your payments as scheduled, you shouldn’t have a problem removing this from your credit reports by working with the reporting bureaus.

You should make sure to contact your lender and let them know that your cosigner has filed bankruptcy, and that you fully intend to repay your loan as promised.

Does Everyone Who Files For Bankruptcy Lose Their Vehicle

Very few people who file for bankruptcy in Canada have to give up their car. All of Canadas provinces specify that under certain conditions, a motor vehicle is exempt from seizure in bankruptcy.

Your particular situation will be determined by where you live, the value of your vehicle, whether you use it for your work or for travelling to your workplace, and whether you own the vehicle outright or pay lease or loan payments for it.

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What If My Car Is Being Repossessed Can I Stop It

If you are behind on your car payments, the lender has the right torepossess the vehicle. However, when you file either Chapter 7 or Chapter 13 bankruptcy, the court issues anautomatic stay. This freezes all repossessions, giving you time to catch up on missed payments. Even if your car was recently repossessed, filing bankruptcy can help you get it back and get it back fast.

If you file Chapter 7, you may be able to retain your car if you make timely payments. Under Chapter 13, you may be able to keep your vehicle by paying the creditor the value of the car rather than the full amount due on the debt.

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