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What Happens to Your Car When Filing Chapter 7 Bankruptcy?

What Happens to Your Car When Filing Chapter 7 Bankruptcy?
"Many individuals who file for Chapter 7 bankruptcy ponder what will happen to their assets during the process. Some individuals believe that the bankruptcy trustee will confiscate and liquidate all assets for the benefit of the creditors. This is completely false, as a person cannot obtain a fresh start through bankruptcy if they lose all of their property, particularly their vehicle. How can someone get to work if their automobile was sold without their knowledge? Depending on the state in which a person resides, various exemption laws exist that protect varying amounts. In today's economy, personal property values have decreased significantly, making it more difficult for a bankruptcy administrator to sell nonexempt property.If a vehicle valued at $10,000 was exempt for $5,000, would it be worthwhile for a bankruptcy trustee to sell the car at auction for perhaps $6,000? For all of their time and effort, the net proceeds would only amount to $1000. This is why they will rarely squander their time unless it is a valuable classic or exotic automobile. This is another reason why it's best to let a bankruptcy attorney worry about a person's property protection. They will be familiar with the local trustee's requirements and acceptable property values for a successful bankruptcy discharge.What happens to financed automobiles in a Chapter 7 bankruptcy is the other side of the coin. If you can afford it, you are permitted to retain it. The majority of lenders will require the borrower to sign a reaffirmation agreement, which reaffirms the debt with the lender. All of this amounts to a pledge to continue making payments after the bankruptcy discharge. This is also the time to dispose of the citrus. When filing Chapter 7 bankruptcy, if you are upside down on a car loan or owe a significant amount of money on a derelict car, you must return the vehicle to the lender and discharge the debt. Contact the bankruptcy attorney and have them contact the lien holder to request the property's return. Many individuals make the error of keeping a car that they cannot afford.They believe they need the vehicle, so they will attempt to continue making payments. The problem with this logic is that once a person signs a reaffirmation agreement, they are obligated to abide by its terms. This cannot be added to the bankruptcy petition at a later date. In other words, if they can afford it, the creditor will pursue them, and they will have no protection because they cannot apply for bankruptcy for seven years.
" - https://www.affordablecebu.com/

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"What Happens to Your Car When Filing Chapter 7 Bankruptcy?" was written by Mary under the Finance / Wealth category. It has been read 200 times and generated 1 comments. The article was created on and updated on 31 May 2023.
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