If you own a car and are thinking about filing for Chapter 7 bankruptcy, you might wonder whether or not you will be able to keep your car. Keeping a car is often allowed in Chapter 7 bankruptcy cases but not always. Here are several things to know about this subject in Chapter 7 bankruptcy.
You can keep it if you can exempt it
In order to keep your car when filing for Chapter 7 bankruptcy, you will need to exempt it. Exempting an asset is something that requires analyzing the asset and determining if it falls within the guidelines in your state. Most states allow a person to exempt a car as long as the car meets certain conditions. In most cases, this will require having a car that is not worth a lot of money and that has very little equity. If you are not sure if you can exempt your car, you would need to talk to an attorney. An attorney will be able to answer this for you. If you cannot exempt it for any reason, you would not be able to keep it if you file for bankruptcy.
You would need to reaffirm the debt if you have a loan
If you can exempt the car and have a loan on the car, you will have to go through another step before you will be able to keep your car. This step involves the process of reaffirming your loan. To do this, your lawyer will send a reaffirmation of debt letter to your car loan lender. The letter basically states that you are filing for bankruptcy but want to keep your car along with the loan you have on it. If your lender agrees to this, you can keep your car as long as you continue making the payments on it. Your payment terms will not change if your lender agrees to the reaffirmation of debt. If your lender does not agree to it, you may end up losing your car.
You can find out more through a bankruptcy evaluation
The best way to find out whether or not you could keep your car is by visiting a bankruptcy lawyer for an evaluation. During this evaluation, a lawyer will examine your debts, income, and assets and can help you understand how filing for Chapter 7 bankruptcy would affect your finances. To learn more about this, contact a Chapter 7 bankruptcy lawyer today.
Share16 April 2019
Too many single people assume they don't need to plan their estate. My brother fell into this category, and his unexpected passing left our entire family struggling to deal with his home, belongings, and financial accounts. It took nearly three years for the courts to set up a deal because he left no paperwork detailing how he wanted his estate divided. The situation immediately convinced me to work on my own estate, even though I'm still in my early 30's and don't have children or a spouse to worry about. Since it's a little harder to pick beneficiaries and estate managers when you're single, I collected the resources I used for making my own decisions and decided to publish them here on my blog. Use these resources before talking to an estate planning attorney so you're prepared for making hard decisions.