Keeping a car with Chapter 7
- Author David Siegel
- Published November 15, 2007
- Word count 451
People love their cars. They would give up just about everything they have, as long as they don't have to give up their car. One of the great things about Chapter 7 is that a person can typically keep their car, while eliminating most or all of their unsecured debt. There are several instances where a person can keep his car, while in a Chapter 7 bankruptcy case.
These instances include:
The actual value of the vehicle falls within the stated exemption amounts under either state or federal law. An example of this situation is where someone owns a car outright and the market price of the car is less than the exemption amount provided by state or federal law. An example would be a car that has a value of $1500 which is paid in full.
A second instance is called the reaffirmation. Reaffirmation on an auto debt is signing an agreement to be fully liable for that vehicle debt on an ongoing basis after the bankruptcy case has concluded. The advantage of reaffirming a debt is that a debtor can protect the equity that is in the vehicle, re-establish credit by making continued payments on that vehicle, and of course, being able to keep the vehicle. Oftentimes, a lender will re-work the lone agreement so that the debtor is paying possibly a lower monthly payment or possibly a lower rate of interest in exchange for signing the reaffirmation agreement. Some lenders are not so flexible. However, under the current economic climate, I have seen an abundance of lenders that are willing to negotiate the terms in an effort to obtain a reaffirmation agreement.
The final method where a debtor can keep a vehicle with Chapter 7 is to redeem the vehicle. The debtor winds up making a one time lump sum payment for the entire fair market value of the vehicle. This amount is typically less than what is owed on the outstanding balance. The barrier here is that the debtor typically does not have the ability to make a lump sum payment of the fair market value of the vehicle. There are certain lending institutions which specialized in redemption lending. In those cases, the debtor actually signs a new loan with a new company for the fair market value of the vehicle and the original lender is paid off. Although this may sound like a great idea, oftentimes, the interest rate on the new loan is not much better in the long run than continuing to pay for the original loan.
With so many ways to keep vehicle while in a Chapter 7 bankruptcy, the debtor really stands in a great position to maintain that item and continue to pay for it overtime.
David M. Siegel is the author of Chapter 7 Success: The Complete Guide to Surviving Personal Bankruptcy. He is a member of the American Bankruptcy Institute and currently practices bankruptcy law in Chicago and its surrounding suburbs. Additional information is available at http://www.chapter7success.com .
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- The Role of Diplomacy in Unrecognized States: A Case Study of Somaliland
- Ontario’s New Homeowner Protection Act
- Why Nanda & Associates Lawyers Are the Top Choice in Brampton
- Essential Contracts Every Freelancer Should Have
- What to Do When Your Ex Violates a Custody Agreement
- How Houston Personal Injury Lawyers Handle Insurance Companies
- How to Prepare for Your First Meeting with a Personal Injury Lawyer in Orlando
- Best Books for Defense lawyer for Felony Robbery
- Establishing a Company in Serbia: A Guide to Business Ownership Types
- How To Get Compensation for a Work Injury
- Navigating Compliance for Personal and Professional Contributions
- Unraveling the Mysteries of Intellectual Property Law: A Comprehensive Guide
- Boston Car Accident Attorneys and Insurance Companies: A Complex Relationship
- How a Los Angeles Car Accident Attorney Can Help You
- Slip and Fall in Chula Vista: Who is Accountable?
- Can I Get Compensated After a Truck Accident in Los Angeles
- Local Tax Attorney vs Competitors: A Comparative Analysis of Legal Services in Orlando
- J. David Tax Law: Your Top Tax Levy Lawyer in North Carolina
- Who Can Garnish Tax Refunds: Your Questions Answered
- Unlock the Secrets to Handling a North Carolina Notice of Deficiency
- The Importance of Financial Services: Enabling Debt Management and Legal Debt Settlement
- Justin C Freeman
- What are the Eligibility Criteria for a Spouse Visa? How to find right Spouse Visa Attorney in Houston?
- Importance, Benefits, and Tips for Hiring a Houston Immigration Attorney
- Importance and Tips of Hiring a Houston Immigration Attorney
- The Importance of Protecting Whistleblowers
- WHY CLASS ACTIONS ARE SO IMPORTANT TO SOCIETY
- THE CONSTRUCTION INDUSTRY AND ALTERNATIVE DISPUTE RESOLUTION (ADR) MECHANISMS
- Lawyer Connections - Finding a Criminal Defense Lawyer
- “The House is Haunted” – Surely the Value should be Decreased?