Can You Keep Your Car in Bankruptcy?

Can You Keep Car If You File For Bankruptcy?
[Law office of Malik Ahmad can be contacted to get free consultation for bankruptcy]
I have been asked many times about keeping car after declaring bankruptcy. The simple answer is yes, you can keep your car. But also it this is a white elephant, and you are fed up making the huge monthly payments, you can get rid of too. The federal plan for bankruptcy does not like to wipe out everything you have. You still can keep a job, and of course driving from to work and back to home. A car is an indispensable tool, and one cannot live without it. You have to drive to work. So let’s handle this questions once and for all. Debtor who file bankruptcy can keep one car in Nevada up to $15,000. worth of equity. Again, you have to think if you can afford the payment and like to continue the car. The most important questions is that if you can afford the car payments.
By filing bankruptcy, you erase your personal obligation to pay debt. When a debtor reaffirms debt, she is agreeing to continue being obligated for the debt, as opposed to discharging it as part of the bankruptcy. As a condition of keeping the car, your lender will make you reaffirm the obligation to make your car payments. After you have executed the reaffirmation agreement with the help of your attorney, you will continue to make car payments and use your car exactly as you did before bankruptcy. Reaffirmation agreements must be taken seriously because once you sign, you have taken the obligations to make the payments as agreed. The Court will not approve your reaffirmation of your car loan if to do so would constitute an undue burden. Therefore, the consumer must be able to demonstrate that she can continue to make her car payments before the Bankruptcy Court will approve the reaffirmation.
Is Your Car Worth to Keep It?
One of the common misconceptions about bankruptcy is that you will lose all of your property if you file. This is simply not the case. Many people who file bankruptcy retain all of their property through the process through the use of the exemption laws. However, it is important to meet with a knowledgeable bankruptcy attorney to discuss your state’s exemption laws. Additional equity can be protected by using the state wildcard exemption. If you owe more than your car is worth you need not worry about exemptions since you have no equity in your car. The bankruptcy trustee will only seek to liquidate property that has equity which exceeds the amount of your allowed exemption. Keep in mind also that you would likely have the option of paying the Trustee the amount of the non-exempt equity in order to retain your car. To summarize, if you can afford to continue to make your payments and do not have non-exempt equity in your car, you will be able to keep it through the bankruptcy process. If you have fallen behind on car payments and need time to get caught up, chapter 13 bankruptcies may be an option to get you the car back.

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