Here are the three most common methods for keeping your vehicle after filing for bankruptcy. Depending on the state, you may or may not be able to retain your vehicle after filing for bankruptcy. Check your local regulations.
These three options can provide you with peace of mind and a possible way to keep your car.
The legal term for the first one is a reaffirmation of the auto loan. In this circumstance, your attorney has the opportunity to negotiate with your lender to obtain improved loan terms. He can attempt to bargain for a reduced interest rate. Perhaps the lender will modify the loan's term, which would reduce your monthly payment and save you money.
If your lender is unwilling to modify the current loan terms, you may be better off including the loan in your bankruptcy filing and surrendering the vehicle.
With a reaffirmation, you are essentially obtaining a new auto loan for your current automobile. If your attorney believes that you can do this and repay the loan responsibly, he will prepare the necessary documents for you to sign. The final decision rests with the judge, who has the authority to decline the reaffirmation agreement.
The following option is to continue with the existing loan. If you are nearing the end of your loan and the vehicle is still in good condition, this may be a viable option. This may not be available in all states, so you will need to consult a lawyer regarding the laws in your jurisdiction.
If you opt for a ride-through, you may no longer receive monthly statements, so you will be responsible for continuing to make payments. This may be somewhat riskier because bankruptcy laws prohibit creditors from contacting you regarding delinquent debt. You must give close attention to the due date and make the payment on time to avoid having your vehicle repossessed.
Another option is to redeem the vehicle and pay its actual market value in cash. For instance, if you owe $6,000 on a car that is now worth $2,000, you can pay the market value of $2,000 to acquire ownership. The balance will be wiped out along with the remainder of your debts upon filing for bankruptcy.
One Final Point...
In addition, if you owe more on your vehicle than it is worth, you may choose to discharge your car payments with your bankruptcy filing.
If this is the case, it may make more sense to dispose of your vehicle through bankruptcy. Then, look for a subprime financing and purchase a new vehicle so that you can start over without negative equity.""
" - https://www.affordablecebu.com/