If you are considering filing for Chapter 7 bankruptcy, you may be wondering whether you will be able to keep your vehicle. Fortunately, it is possible to keep your vehicle and file for bankruptcy- even if you are still financing it. People with car loans have three options under Chapter 7 – they can reaffirm the debt, redeem or surrender their vehicle.
If you choose to reaffirm your car loan, you agree to continue making payments on the loan. You will need to fill out a Chapter 7 Individual Debtor’s Statement of Intention that lists your secured debts. Continuing to make on-time payments on the auto loan after bankruptcy will help rebuild your credit score quickly as these payments will be reported to the credit agencies.
If you choose to redeem your car, this will mean coming up with the money to completely pay off the loan. This option is oftentimes the most difficult of the three.
Surrendering the car allows a borrower to return the car to the lender in bankruptcy. This is a viable option if you realize you are not able to make your monthly payments and the auto loan has become too burdensome or you are upside-down on your auto loan. This option can essentially give you a second chance with a less expensive, more affordable car payment.
If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.