Can I pay off my car through bankruptcy?
Those who are considering bankruptcy often wonder how it will affect their current car loan or lease. You may wonder if you can keep the loan during the bankruptcy discharge process or if arrears can be paid off or caught up through the bankruptcy. You can preserve your car and, depending on which chapter of bankruptcy you file, you may be able to catch up or pay off the loan.
To elaborate on this, let’s now examine how each of these things happens procedurally across different chapters of bankruptcy. A vehicle loan is almost always preserved during the bankruptcy process, regardless of what chapter is filed. The chapter will usually dictate how the loan is kept intact. In a Chapter 7 filing, vehicle loan payments can continue during the filing process with little or no change from the way they would have been made outside of bankruptcy. The biggest difference is that a lender can ask someone who has filed Chapter 7 bankruptcy to “reaffirm”, which means that the loan will be excluded from discharge. In contrast, Chapter 13 bankruptcy does not allow for reaffirmation. If you want to keep your existing loan during the Chapter 13 bankruptcy process, you can indicate this in the plan that is filed with the Chapter 13 bankruptcy. Chapter 13 is a great option, because not only can you repay arrears, but also the entire loan, through the plan. If you choose this option, your existing loan structure will be effectively thrown out, and the duration of payments will be determined by the total length of your plan. If you had a plan that lasted five years, the car would be paid off in five years by the bankruptcy trustee using the money you pay to them. The interest would be calculated based on the current market interest rate plus a risk adjustment. Payments would be made in equal amounts, just as they would outside of bankruptcy. Call Now for a Free Strategy Session with a MN Bankruptcy Lawyer at LIFEBACK Law Firm.
Call Now for a Free Strategy Session with AN MN Bankruptcy Attorney at LIFEBACK Law Firm.
There is countless possibilities in bankruptcy. You can eliminate your debts, and you can also protect your assets. You will have the opportunity to discuss with an attorney from Lifeback how to tailor the bankruptcy process to meet your needs and protect your assets. So, when the time is right, or when you are ready, please don’t hesitate to reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to
www.lifebacklaw.com
. https://www.youtube.com/watch?v=s4Ne0Rbx_c4
