Keep Your Car; File for Bankruptcy
Bankruptcy can help a borrower from a car loan issue. Remember that bankruptcy for auto loan is just to prevent debt collection by rearranging the agreement between the creditor and its borrower. Keep in mind that in bankruptcy, it does not eliminate the voluntary lien like an auto or a home loan lien. So if a bankrupt individual does not pay for the vehicle, the bank can utilize its lien to take it back.
Keeping your valuable vehicles can be accomplished even while encountering tough financial situations. A bankruptcy lawyer can be your best companion in the most challenging status of your vehicle loan. There are some repayment alternatives being offered in petitioning for bankruptcy. Every bankruptcy phase has a distinct feature suitable for particular a financial situation.
In Chapter 7, when the payment of a debtor is current he can go ahead and proceed with it. He can keep his car, however, there are a few conditions to follow. He should ensure all of the equity with a wildcard exception, motor vehicle exclusion or both. A few lenders negotiate in a reaffirmation arrangement with better terms. The debtor can even pay the car’s fair market cost through a lump sum payment option.
On the other hand, in Chapter 13, a borrower can also keep his car in some conditions. When the client is behind his payments but able to pay off his auto loan balance, he can keep the vehicle through payment arrangement in Chapter 13 in the span of three to five years.
In some situations, the ideal thing to do is to surrender the car to the lender. A lot of filers will surrender the vehicle when the monthly scheduled payment is way too high, it is either they pay excessively or they don’t need the vehicle at all or the accountability.
Filing a Chapter 7 bankruptcy form, the box provider for the “surrender the property” must be checked. The time that the case has finished the lender will contact the debtor o his bankruptcy attorney to schedule for pickup.