Can I Keep My Car in Bankruptcy - Read More

  • car loan

Should I Keep My Car during Bankruptcy?

Bankruptcy is a name which often causes people to panic. This is so because most of the time, it is associated with the image of being thrown on the streets penniless. However, nothing could be farther than truth. More often than not, the financial situation of an individual is tight, which has led them to file for bankruptcy. Since financial problems can affect a number of areas of your life including your job, property, and vehicle, many people question whether it is appropriate to keep their vehicle if they plan to file for bankruptcy.

Since you require your vehicle to not only commute to and from your work, you might also need it to get other works done too. It is, therefore, a difficult choice to make when it comes to keeping or letting go of your vehicle during the time of bankruptcy. As every clients’ financial situation is unique, it is important to consult adept bankruptcy lawyers such as those of Los Angeles based law firm Recovery Law Group for their opinion regarding the attempts to make for a fresh financial start. According to bankruptcy lawyers, it is important to ask yourself certain questions to decide whether it is worth keeping the car or not, such as:

  1. Is the car worth it? Many times, people who file for bankruptcy have a car loan which is simply not worth it. For a car valued at $10,000, having to pay a loan of $15,000 is foolhardy, especially when you are considering bankruptcy as a way out of the financial In case you have an inflated car loan, which exceeds your vehicle’s worth, it is better to let go of the car and buy a cheaper one.
  2. Are you being asked to sign a reaffirmation agreement in bankruptcy if you wish to keep your car? In case the lender is asking for your signature on a reaffirmation agreement, bankruptcy lawyers inform that you will be held legally liable to pay for the car loan even after all other debts are discharged after bankruptcy. If you are unable to pay the reaffirmed loan, you will be liable for any balance that remains after the vehicle is repossessed and auctioned off!
  3. How many more years of car payments are left on your car loan? According to bankruptcy lawyers, if you have a longer duration of repayment period (more than 2 years) on your car loan, the risk is higher of you defaulting after bankruptcy. In case you opt for reaffirming such a car loan after bankruptcy, you could put yourself at unnecessary financial risk.

It is therefore important that you discuss your case with bankruptcy lawyers to find out all your options and weigh them on the order of merit. It is not necessary what worked for someone else might be goo in your case too. Consult with bankruptcy lawyers regarding the protection of your assets during bankruptcy proceedings.