BANKRUPTCY VIDEOS
- Introduction to Bankruptcy
- Types of Bankruptcy
- Limits of Bankruptcy
- Filing for Bankruptcy
- Meeting of Creditors
- Bankruptcy Court Hearings
- The Bankruptcy Discharge
- The New Bankruptcy Law
- The Credit Damage Myth
- Chapter 7 Bankruptcy Explained
- Chapter 13 Bankruptcy Explained
Blog
- Bankruptcy Options For Automobiles
- How Often Can I File for Bankruptcy?
- Will Filing Bankruptcy, Cause Me To Lose My Recreational Vehicle(s)?
- Am I Better Off Trying to Work with a Credit Counseling Agency?
- Will I Lose My Retirement Account If I File Bankruptcy?
A commonly overlooked benefit of bankruptcy is how it can modify the obligations you owe on your motor vehicles / automobiles. Many people who come to... Read more
How Often Can I File For Bankruptcy? You can file for Bankruptcy multiple times. However, certain time restrictions apply. These time restrictions... Read more
Assuming you own the recreational vehicle free and clear or have substantial equity in it, the answer as to whether you will be able to keep it depends... Read more
Honestly, I cannot think of any situation where working with a credit counseling agency would be better than filing bankruptcy. I would suggest pursuing... Read more
In nearly all bankruptcy cases, you will not lose your retirement account. The bankruptcy code specifically provides certain exemptions. These bankruptcy... Read more
How Bankruptcy Law Protects You
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Reduce the Balance Owed on your Vehicles
Filing Bankruptcy can reduce the amount you owe on your vehicles from the present outstanding balance to the current market value of the vehicle. For example, if you owe $18,000.00 on a car that is worth $8,000.00, it may be possible for you to get rid of the $18,000.00 obligation and replace it with an $8,000.00 obligation for your vehicle. In other words, instead of owing $18,000.00 on your car, through filing bankruptcy you would end up owing only $8,000.00, which is the present market value of the vehicle. You can do this through either a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy.
Chapter 7 Bankruptcy Options
In a Chapter 7 Bankruptcy, you would need to be able to pay the bank the full $8,000.00 in return for the vehicle. You would need to obtain that $8,000.00 from a friend or family member or obtain a loan in that amount. The loan would be from a company that typically specializes in providing financing for principal reductions in bankruptcy cases for automobiles. Therefore, you would either have to come up with the whole amount cash, or obtain a loan from a willing financial institution. None the less, it would be worth the effort because, as you can see in the above example, you would have been able to eliminate $10,000.00 in debt and keep your car.
Chapter 13 Bankruptcy Options
In a Chapter 13 Bankruptcy case, you could simply force the bank to accept the $8,000.00 for the vehicle. In doing so, you will force the bank to accept a new payment amount for the vehicle. This can be spread out up to 5 years under a Chapter 13 bankruptcy plan. For example, your $8,000.00 could be made in payments of $135.00 a month.
Reducing the principle value of your vehicle through bankruptcy is a very powerful tool. It can stop you from being upside down on your vehicle immediately. It also would reduce the amount you owe on your vehicle substantially. For further information about this benefit, contact our office for a free consultation.