Will I Lose My Car If I File For Bankruptcy?
Our attorneys are able to help most clients keep their vehicle — even reduce balances and payments in some cases. The bankruptcy lawyers at Rauser & Associates Legal Clinic LLP have extensive experience helping clients gain a fresh financial start. We have handled more than 40,000 bankruptcy filings to allow hardworking Americans the chance to get out from under debt and build a more stable future. If you are concerned about losing your car if you file for bankruptcy, or you have questions regarding any of the exemptions provided for Chapter 7, do not hesitate to schedule a free case evaluation at any of our office locations throughout Ohio.
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Along with a home mortgage, a car payment is a significant drain on finances. When debt starts to mount, individuals begin worrying about the stability of their financial future. It is wise to seek the counsel of an experienced Ohio bankruptcy attorney to learn more about your options under the United States Bankruptcy Code.
Can I Keep My Car In Bankruptcy?
If you file for bankruptcy, there are multiple protections automatically built in. For example, when you file, the automatic stay goes into effect. Essentially, the automatic stay prevents further collection efforts by creditors. This includes lawsuits and auto repossessions. Additionally, Ohio exemptions typically allow you to keep your car, or make it exempt from liquidation. Beyond those elements of bankruptcy, you typically have two options:
- Reaffirmation: If you can negotiate an agreement with your creditor, you can essentially reaffirm the terms of the original debt. In layman’s terms, it means that both you and the creditor ignore the fact that your bankruptcy took place, and you continue to make car payments as if nothing happened.
- Redemption: Slightly less common, you can reach an agreement with the creditor to which you will make a lump-sum payment that is equal to the value of the car rather than the remaining balance owed.
Depending on their specific circumstances, some individuals choose to surrender the asset back to the creditor — with any deficiency balance being discharged in the bankruptcy. At this point, the creditor will sell the car and apply the sale price to the balance you owe. Since the car is no longer in your possession, the difference between the sale price and the remaining balance (often called the deficiency) is an unsecured debt that can be discharged in bankruptcy.
If you have further questions about protecting your car through the bankruptcy process, contact any of our convenient Ohio offices by calling 888-843-5787. Offices in Columbus, Cleveland, Akron, Youngstown, Canton and throughout Ohio. Someone is available six days a week to discuss your options.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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