As an Asheville bankruptcy lawyer, I speak with people everyday who worry they will lose their belongings if they eliminate their credit card and medical debts with a bankruptcy case.
In over 90 percent of the cases filed, Chapter 7 bankruptcy clients keep all of their property.
For cars, bankruptcy clients have four different options. First, they can choose to ‘reaffirm’ the debt. This means the same terms will apply to the car loan as before they filed a case (occasionally we can negotiate better terms). Second, bankruptcy clients can ‘redeem.’ This option is basically a refinance of a car loan for the amount the car is worth, not the amount still owed. This works great for underwater cars. Third, bankruptcy clients can ‘retain and pay’ which means they just keep paying on their car loans without reaffirming the debt. While the lender must agree for this choice to work, almost all car loan companies do (Ford Motor Credit and Credit Unions generally do not). Lastly, a bankruptcy client can surrender their car and eliminate their liability on the loan.
For more bankruptcy information about your car or otherwise, please contact me for a free, initial consultation.
*The information contained on this website is not intended and does not constitute the providing of any legal advice or any legal opinions or services to any user thereof. The information available on or through this web page is not intended and shall not be used as a substitute for the advice and consultation provided by an attorney. Any factual examples used to illustrate concepts are hypothetical and do not depict actual events or real persons.
