Sometimes, it may be the purchase of a single car that puts somebody into the position of having to declare bankruptcy. Maybe someone goes through a mid-life crisis and purchases an expensive sports automobile, thinking they can afford it. Then, the economy takes a turn for the worse and that same person is left overwhelmed in producing payments on the automobile of their dreams. If you are wondering how bankruptcy affects ownership of a vehicle, then read on for more information.
Many individuals are afraid they'll lose their car to bankruptcy court or the creditors after filing for bankruptcy. The truth is this doesn't have to happen. There are many bankruptcy laws that exist and their purpose is to protect your automobile and permit you to continue making payments on your car loan.
Filing a Chapter 13 bankruptcy is an appealing alternative for many people, because this type of bankruptcy protects one's automobile with a repayment plan. Within this type of bankruptcy, a judge will approve a new payment plan for a person struggling with huge debt. This means that a person could retain his or her house and automobile, if that person makes every payment within the plan. If an individual misses one payment, then the entire plan becomes void and a person may not be able to file Chapter 13 bankruptcy again.
Other requirements within a Chapter 13 bankruptcy are that an individual has a stable job and a stable income. If one has filed for bankruptcy in under four years prior to the Chapter 13 bankruptcy filing, then he or she's not eligible to partake in a Chapter 13 repayment plan. An individual may also be permitted to keep his or her vehicle under a Chapter 7 type of bankruptcy.
There are certain exemptions that allow an individual to retain a car under a Chapter 7 bankruptcy, but there are requirements that must be met. For example, an individual must've no equity to be able to keep the car in question. Otherwise, if there is capital in the automobile then it may be sold to pay off the automobile loan. If you are really concerned about keeping your car while filing for bankruptcy, then it can be beneficial to hire a lawyer to help with your bankruptcy case.
An attorney will immediately be able to tell you upfront if it is possible to keep your car while filing for bankruptcy. In addition, an attorney will direct you in the right direction and help you choose the right type of bankruptcy to file. If you are having any doubts at all, consult with a lawyer before filing for bankruptcy.
