I get it you need a car to go to work so why would anyone want to take your car away?  Wont you need it for a fresh start after the bankruptcy?  Well that can take a whole day to explain in depth so here is the quick version.  Your car is an asset that has some kind of value.  Maybe it worth a whole lot of money and maybe it not worth the gas in the tank.  Either way the bankruptcy system wants to know what it’s worth and if it can be taken away from you to help pay off your debts.  Because of this your car will be treated in different ways in your bankruptcy depending on its value.

If the car is financed the bank or credit union has a say in what happens with the car.  You will need to tell your attorney if you are current on the loan payment and if not how far behind you are.  If you are current your attorney may be able to work out an agreement with the lender to keep the vehicle – this is called a reaffirmation agreement.  If you are trying to represent yourself in bankruptcy then you will need to go to a hearing get the judge to approve an agreement (another good reason to hire an attorney to represent you in bankruptcy)

If you own the car outright then the bankruptcy trustee might have a say in what happens with the car.  If you own the car and its not that valuable then you probable can keep it but it will all come down to the value of the car.

Here are 5 common questions about bankruptcy with a car loan you want to talk with your attorney about. Since every situation is different seek out an experienced bankruptcy attorney who will be able to clarify the options… but you should be prepared ask them the questions for your piece of mind:

  1. What will happen to my car during the bankruptcy?
  2. Will I lose my car if I file bankruptcy?
  3. Can I keep making car loan payments if I file bankruptcy?
  4. How soon will I need to give up my car after I file bankruptcy?
  5. How does a credit union get their car back after I file bankruptcy?

Print these questions out and know your right and options  With just these 5 questions about bankruptcy with a car loan you can make an informed decision on your vehicle options.  Not asking these questions could cost you time, money and maybe even your car.  In Utah? Call us for a consultation and we can discuss these and any other bankruptcy question you might have.

#Utahbkguy

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