When you file for bankruptcy, your assets are liquidated to repay your creditors. This includes any vehicles you own outright, as well as any vehicles you are still making payments on. If you are current on your loan payments, the lender may be able to repossess your vehicle. However, if you are behind on your payments, the lender may not be able to repossess your vehicle until after your bankruptcy case is completed.
If you are current on your loan payments, it’s possible to keep your vehicle by reaffirming the debt. This means that you agree to continue making payments on the loan and that the lender will not repossess your vehicle. You will need to sign a new contract with the lender and make sure that you continue to make your payments on time.
Reaffirming an auto loan means that you are reaffirming your original agreement with the lender. This means that you are still responsible for repaying the full amount of the loan. This is in addition to any interest and fees that may have accrued. If you have fallen behind on your payments, reaffirming your loan can help you get back on track.
If you are considering reaffirming your auto loan, it is important to speak with your lender to discuss your options. You should also make sure that you understand the terms of the agreement before you sign anything. Once you have reaffirmed your loan, you are responsible for making all future payments on time. If you default on the loan, the lender may repossess your vehicle.
If you are behind on your loan payments, you may be able to keep your vehicle by redeeming the debt. This means that you pay the lender the amount that you owe in full. Once you have redeemed the debt, the lender cannot repossess your vehicle.
A bankruptcy or debt settlement lawyer can help you with the threat of repossession or with redeeming your loan.
Priority debts typically include obligations like taxes, child support, and certain types of wages. Whether a car loan constitutes a priority debt depends on the circumstances and the type of bankruptcy being filed.
In Chapter 7 bankruptcy, priority debts are generally paid first from the debtor’s available assets. However, car loans typically don’t fall under this category unless they involve taxes or liens.
In Chapter 13 bankruptcy, which involves a repayment plan, car loans may be treated differently.
Car loans are often considered secured debts. This means they’re backed by collateral – in this case, the car. While they’re not typically classified as priority debts, they’re important because defaulting on them can result in repossession of the vehicle.
If you have any questions about whether your car loan will be discharged in bankruptcy, you should speak to an experienced bankruptcy attorney. They can help you asses your situation and determine how to proceed. For more information or to schedule a consultation to discuss your situation with an experienced debt settlement lawyer, contact the Law Offices of Robert M. Geller at 813-254-5696.
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