Jul 01, · However, if the debtor finds themselves unable to commit to the current vehicle payment amount, surrendering the car to the creditor within the bankruptcy may be the best option. Please feel free to contact the Law Office of Ray Garcia, P.A., at or via email at [email protected] for a free consultation. Nov 27, · I filed a chapter 13 then converted to a chapter 7. file converted discharge I clean up my report while waiting on my discharge, also attain two credit cards (1) secure Opensky and a Discover secure. Only baddie I'm waiting on to clear up Is the car loan to update IIB. So now I'm waiting also to get another car. Jul 10, · Keeping or Surrendering your Home or Car in Bankruptcy July 10, When you file for bankruptcy you can choose to keep or surrender secured collateral, such as your house or car. Depending on what chapter you file, you can also use a bankruptcy to become current on any payments that you may have missed.
Related videosWhat happens to my car loan in bankruptcy?
Did you know that you can easily surrender your car in a Chapter 7 bankruptcy? You can escape high loan payments, punishing interest, and avoid lawsuits. If you lease or finance a car and attempt to surrender the car outside of bankruptcy, your lender will likely charge you all sorts of fees. A deficiency balance is the amount of money you still owe the lender even after surrendering the car.
Deficiency balances can easily be many thousands of dollars after the dust has settled. Surrendering a car during the bankruptcy process is completely different. At the outset of your case, we notify the Bankruptcy Court and your lender that you intend to surrender your vehicle.
After your case is started, your lender may attempt to talk you out of surrendering your car. They would prefer that you keep the car and continue making payments.
Some lenders may wait until after your bankruptcy case is over to retake possession of your car. It may give you the best way to deal with a huge amount of income taxes you owe. There are many other potential reasons to file a Chapter 13 case. Dealing with your vehicle debt may be a minor issue in the big picture. It lets you try to keep your vehicle and then decide to surrender it later.
Down the line you may not be able to afford to pay for the vehicle after all. Months or even a couple years after filing your case your income may go down or expenses may go up. It may get into an accident. You may no longer need the vehicle as much or may be able to get a less expensive one.
Pretty much at any point in your 3-toyear Chapter 13 case you can decide to surrender your vehicle. It gets discharged at the end of your case. That fixed amount is a based on how much the debtor can afford to pay all of his or her debts during the period of time the case lasts. Some of the money usually goes first to other legally more important debts. It only changes who gets paid how much within that pool. Our offices are open and we remain committed to serving your needs in this challenging time.