Know How Car Loan Works and What Can Bankruptcy Do To It
Saving your precious car from your creditor can be done in a bankruptcy filing. However, there are a lot of individuals are under the misconception that filing for bankruptcy can wipe away an auto loan and keep the car or vehicle free from any payments. On the contrary, it is not true. Filing for bankruptcy will unwind your responsibility to pay your loan, however without making payments, you are like giving it away to someone and you will never see your car anytime soon. Therefore there is no free car by filing a bankruptcy case. Talk to a bankruptcy lawyer riverside and know how bankruptcy works for your auto loan.
As we all know buying a vehicle is costly especially for the end ones, and many individuals cannot even manage to pay for one. Usually, a debtor will pay the car through an auto loan which entails monthly installment fees together with the interest. Generally, the bank, will minimize the investment risk and oblige the customer to have an agreement to secure the loan by positioning the car as collateral. The second car loan arrangement creates a lien on the vehicle. The lien permits the creditor to repossess the care if a debtor fails to pay on the loan.
Now, the moment that the transaction is completed, the debtor has two important things to know. First is the agreement to pay the loan, and the agreement that permits the creditor to repossess the vehicle when the debtor failed to make payments.
How does bankruptcy works on auto loans?
When a bankruptcy is filed for auto loan purposes, the debtor gets rid of the debt effectively by surpassing the contract between the borrower and the lender. However, it requires the debtor to repay the auto loan. Keep in mind that bankruptcy will not get rid of the lien like a car or mortgage lien. So if a debtor fails to make an agreement to pay for the car, when the bankruptcy case has ended, the bank will repossess the car through its lien right.
Find a filing bankruptcy riverside legal adviser now and know what should you do on your car loan and other bankruptcy-related issues.