Whether you have a car loan or a lease, you need to know what will happen to your vehicle when you file bankruptcy. It is important to know how much the car is worth today because this will determine how much you will lose in bankruptcy. Even if you are current on your loan payments, you may not have as much equity in your car as you think.
Can They Take Your Vehicle?
The process of bankruptcy can be complicated, but a bankruptcy attorney can help you sort through exemptions and make sure you keep your vehicle. Bankruptcy will also damage your credit, but it can be an excellent way to get out of debt. There are two types of bankruptcy, Chapter 7 and Chapter 13. Depending on the type you choose, your car might be exempt from bankruptcy.
If your car is paid off, the trustee may be able to sell it for a fraction of its value. The trustee can use the proceeds to pay your creditors. However, if you are behind on payments, your lender may repossess your car. If you still want to keep your car, you can ask your lender to adjust the loan so that you don’t have to make the payments.
You can also surrender your vehicle in bankruptcy. In most cases, your lender will take it back at no cost to you. The lender will either pick it up from you at home or drop it off at a location that is convenient for you. URL: scura.com