What Happens to my Car After Bankruptcy?
A San Jose bankruptcy attorney comments on what happens to your car after bankruptcy...
Many debtors wonder what will happen to the car during and after bankruptcy. Will the court take my car? Can I keep my car? What happens to the loan associated with my car? California is driven, literally, by automobiles. We use them to get to work, to go grocery shopping, and pick up the kids from school. The fear of losing one’s automobile is enough to drive them away from seeking protection through bankruptcy. But fear not ye Californians, you are very likely to be able to keep your car after bankruptcy.
When filing a Chapter 7 bankruptcy in California, you have two options for your car. You can either surrender it back to the lender and discharge the remaining balance at the end of the bankruptcy, or you can reaffirm the debt and keep the car, so long as you continue to make your payments. The same options in a chapter 7 bankruptcy apply should you be leasing your car, you can either surrender the vehicle and terminate the lease or you can reaffirm the lease terms.
In a chapter 7 bankruptcy, should the debtor decide to reaffirm the debt on the and the lender agrees, the original lien remains on the car and should the debtor default on their monthly obligations, the lender retains the option to repossess the vehicle. If you fail to make your monthly payments prior to your chapter 7 bankruptcy being discharged, the lender may repossess but the remaining balance on the loan (the deficiency) will be discharged at the end of the chapter 7 bankruptcy. If you reaffirm and default post-discharge, the lender retains the option to repossess the vehicle and the debtor is still is on the line for the deficiency balance. However, if no reaffirmation agreement is executed, the debtor will remain liable for any deficiency if the car is ultimately repossessed.
If you have questions regarding Bankruptcy in San Jose please contact us at 408.279.2288 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Jose Bankruptcy Attorneys. After you have spoken with one of our downtown San Jose bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of San Jose Bankruptcy Lawyers can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Jose and the South Bay!
