Bankruptcy Law, Consumer Bankruptcy

Will Filing Chapter 7 Bankruptcy Prevent Vehicle Repossession?

When someone is behind on his or her car payments, a Chapter 7 bankruptcy case may allow him or her to catch up on these missed car payments, saving the vehicle from repossession. The ability to do this depends on how far behind the borrower is on his or her payments and whether the loan is already in default.   

While a Chapter 7 bankruptcy case will not permanently prevent the person’s vehicle from ever being repossessed, it can provide the borrower a chance to catch up on missed payments or negotiate with the lender before the loan goes into default.  

Debt Relief

How To Ensure Student Loan Debt Does Not Prevent You From Getting a Mortgage

With the cost of attending a university rising each year, more students are taking out student loans to pay for their education.  According to statistics from the Federal Reserve and New York Federal Reserve, more than 44 million American consumers owe a collective $1.6 trillion in student loan debt. Student borrowers oftentimes graduate with up to six figures in student loan debt. Certain steps can be taken to ensure that student loans do not prevent young adults from reaching important milestones, like homeownership.   

Income-to-Debt Ratio 

When being approved for a mortgage, the borrower’s income-to-debt ratio is an important figure considered by potential lenders. Two different ratios are used by potential lenders. One of them is called a front-end ratio, which looks at the loan applicant’s expected mortgage in comparison to his or her monthly income. The second ratio is called the back-end ratio. This figure reviews the applicant’s monthly expenses, including housing costs, car payments, student loan payments, and other monthly expenses, in comparison to the person’s monthly income. If the borrower’s debt far outweighs his or her income, it is unlikely that person will be approved for a mortgage. However, certain steps can be taken to help boost that ratio. If the potential borrower is carrying a high credit card balance, by paying that balance down, he or she can help boost chances of being approved for a mortgage. If the borrower can pay down the balance in full every month, then that debt will not even factor into his or her debt-to-income ratio.  

Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

Auto Loans in Chapter 7 Bankruptcy- Can you keep your Vehicle?

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

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