If you have to file for Chapter 7 bankruptcy, one of your main concerns may be what happens to your vehicle. Here are some questions you'll likely have about one of your more expensive assets when it comes to how it could be impacted by the bankruptcy.
Will Chapter 7 Bankruptcy Allow You To Keep Your Vehicle?
Be aware that every state is different when it comes to what assets you can exempt under Chapter 7 bankruptcy. In most states, you are allowed to exempt your vehicle as long as there is a licensed driver registered to it. However, things get tricky when you have multiple vehicles. It may be required that each vehicle you own is registered to a different licensed driver, or you may be unable to exempt additional vehicles if they are worth more than a specific dollar value.
If you have a vehicle that does not qualify as an exemption due to the rules regarding vehicles, there may still be other ways that you can keep the vehicle. For example, if there are any wild card exemption rules that allow you to keep items that fall under a specific dollar amount, you could use that to your advantage.
What If The Auto Loan Isn't Paid Off?
If you still have payments to make on your vehicle, your ability to keep it will depend on if your vehicle is repossessed before you are able to file for bankruptcy. Once you file for bankruptcy, you'll receive an automatic stay order, which prevents creditors from contacting you about debts. If you keep putting off the bankruptcy filing, there is a chance that you could lose the vehicle before you officially file. You'll eventually need to pay off that vehicle, but the automatic stay can give you some additional time to get caught up on payments.
Will You Be Able To Get Another Auto Loan After Using Bankruptcy?
The Chapter 7 bankruptcy filing is going to make an impact on your credit, but you are still capable of getting a loan for another vehicle. It all depends on your financial situation and what the lender is willing to do for you. It's possible that you may end up facing a higher interest rate because you are seen as a risky borrower, or you might be denied for the loan completely. There is also the option of using a co-signer to vouch for you and take on the responsibility if you are unable to pay back the loan.
To learn more, contact a bankruptcy lawyer.
Share12 June 2020
If your mountain of debt has grown so tremendous that you can't imagine a way out, then you need to contact a bankruptcy attorney. Even though filing bankruptcy can seem like cheating, it is sometimes the only option when you have consumer or medical debt that is consuming your paycheck and then being left unpaid. An attorney can take a look at your finances and recommend a pathway out of debt utilizing one of the several types of bankruptcy available. Learning more about this process can make it seem more approachable. Dig into the articles on this website to get started with that learning.
