You may be feeling the sting of having to file bankruptcy already, but the idea of having to see your car taken away will feel like an additional kick in the stomach. It is true that a lot of people will lose their vehicles when they are in the middle of a bankruptcy proceeding, but this is not always the case. There may be a possibility you can hang on to that car that is sitting in your drive.
Here are a few things that you should know if you are filing bankruptcy and desperately want to keep your ride:
Keeping Your Car Will Depend On How You File
If you plan to file chapter 7 bankruptcy, this is basically a legal proceeding that allows you to liquidate all of your debt because you have little money or income. Depending on where you live, you may be forced to sell some of your belongings in order to repay a portion of what you owe.
This can include a vehicle that is worth a certain amount of money, according to fair market value. Even though it can be more difficult to keep a vehicle during chapter 7 proceedings, it is not impossible.
On the other hand, chapter 13 bankruptcy is used in situations where a client can repay, but not at the current payment rates. In this type of scenario, a client would have regular income. During chapter 13 bankruptcy proceedings, arrangements will be made with creditors for you to repay a certain amount of money over time. Chapter 13 does not typically involve asset liquidation, and therefore, you will have a better chance of keeping your car.
Some Creditors Will Help You Keep Your Car
Bankruptcy is not just hard on you as the person filing, but the creditors involved as well. When you file bankruptcy, especially chapter 7, it will mean that your creditors are taking a loss. Because of this fact, many creditors will work with you if they know your financial situation. Do not be afraid to talk to them about the chance that you will have to file early on and they may be willing to work with you to find a better payment arrangement.
Having to pay a visit to a bankruptcy attorney to file is never an easy decision. There are always going to be those possessions you do not want to lose. When your car is one of those possessions, be sure to talk to your attorney about options you may have that will help you keep your vehicle. To learn more, contact a company like Liviakis Law Firm with any questions you have.
Share13 February 2015
When I was a child, I regularly visited a local department store. At this lovely business establishment, one could purchase many items including clothing, shoes, and even hotdogs. Sadly, due to competition and other factors, the store closed its doors for the last time several years ago. If the owners of the store had considered bankruptcy options, they might still be meeting customers’ needs today. On this blog, you will learn how to resurrect your business with available bankruptcy alternatives. Regardless of whether you choose to liquidate your assets or reorganize your entity, the opportunity to remain in operation might be an option for you.