Miami Bankruptcy Lawyer, Ariel Sagre, answers your most frequently asked questions.
In this edition of FAQs we will tackle a common concern for many potential debtors.
What will happen to my vehicle if I file a chapter 7 bankruptcy?
(This blog focuses on a chapter 7 case. In a chapter 13 case, the options are different.)
1 of 3 things may happen depending on the specifics of your situation. Here are some typical examples.
REAFFIRM THE DEBT
(If you own or lease your vehicle and are paying a car loan on a timely basis)
You may elect to reaffirm or continue to pay that car loan back and keep your vehicle. In this situation the bankruptcy attorney will assist you in reaffirming this debt during your bankruptcy. A fully executed reaffirmation agreement or lease assumption agreement shall be required for this option.
(If you own or lease your vehicle but are behind on your payments and seek to discontinue paying)
You may decide to surrender or return the vehicle and discontinue making payments, if you feel you will not be able to continue to make the scheduled monthly payment. Perhaps your payments are too high or you can find an alternative travel arrangement, the surrender option allows you to extinguish the vehicle debt once it is surrendered to the financing company. This option requires the financing company to repossess the vehicle.
REDEEM THE PROPERTY
(If you own a vehicle that is valued less than what you owe AND you can make a one-time cash payment for the value of the vehicle subject to Bankruptcy Court approval)
You may decide to redeem the property in a chapter 7 case. The court allows a $1000 vehicle value exemption. If you have an appraisal indicating that your vehicle is valued less than what you owe AND you can pay the total amount of what your vehicle is valued in one payment, you could attempt to redeem the vehicle paying off the value of the vehicle in a chapter 7 case thus owning the vehicle free and clear subject to Bankruptcy Court approval.
Every circumstance is different. At the time of your free consultation with a Miami bankruptcy lawyer your specific situation will be evaluated so that you may choose the best way forward.
Call Attorney Ariel Sagre at (305) 266-5999 to schedule your free bankruptcy consultation.