Filing bankruptcy with car loan can be a complex process for the unwary. If you are trying to keep a car during the bankruptcy process then you really should hire a bankruptcy attorney with experience helping people keep their cars in bankruptcy. There are a few different options within a Chapter 7 bankruptcy if you have outstanding payments on car loans. A Bankruptcy with car loan you can surrender the car, keep the car and continue making your monthly payments, reaffirm the car loan, redeem the car loan with a different lender, or talk to your current lender. Luckily, it is possible to keep a car in a bankruptcy even if you have a car loan. The exact method of keeping it will depend on which type of bankruptcy you are filing for, a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.
Under a Chapter 13 bankruptcy, you may be able to continue to pay off some of your loan in a restructuring of what you owe but the total amount of what you would pay depends on how old the car is. On newer car loans, the person borrowing the money has to pay back the loan in full. New is classified as 910 days or less. If your car is older, they will create a payment plan based on how old your car is. Older means that your car loan is older than 910 days.
Under a Chapter 7 bankruptcy, car owners have a couple of options. They can surrender the car, reaffirm the debt, or redeem the car. Reaffirming a car loan means you agree to continue to make payments on it. Redeeming the car means that an individual comes up with the money to pay off the car loan all at once. Surrendering the car to the lender means you give it back to them. This might not be ideal, but it could give you a chance to get a cheaper car and get a better hold on your finances. Look at your different options with a bankruptcy with car loan and if in Utah discuss them us out side of Utah with an experienced bankruptcy attorney to see which would work best for you.