Disclaimer: The following information is not legal advice, nor is it intended to create an attorney-client relationship. Information contained in this post may constitute attorney advertising and is solely for informational and educational purposes only. *Licensed in MA.
When a person hears the word bankruptcy, they often think they will lose everything!
Most often, Clients who come to see us are super concerned about losing their vehicles and what happens to them in bankruptcy. Relax! I can tell you in most cases, nothing happens to your vehicle and surprisingly, you may actually end up paying less for the vehicle you get to keep.
Bankruptcy Exemptions For Vehicles
The bankruptcy code in general is very forgiving. It truly seeks to give you the fresh financial start you desire. The way it accomplishes this relief is through exemptions.
Exemptions are a monetary allowance that is applied to assets, including vehicles. It is through these exemptions you are often allowed to keep a whole host of assets, including the option to keep your vehicle.
What Are Your Options?
Bankruptcy pretty much offers you the necessary space and time to consider what you want to happen to your vehicle.
When you have an asset like a car or truck, there a number of things to consider:
- Do you want to keep the vehicle?
- Do you want to return your vehicle because it’s too expensive or the repairs are beyond the value of the car?
- Do you want to keep your existing vehicle loan?
- Do you want to try to refinance it at the market rate vs. your current rate and have the difference discharged in the bankruptcy?
All of these things are possible when you file for bankruptcy. Having an experienced bankruptcy lawyer will help you discuss your options and understand the implications of each option.
Bankruptcy doesn’t have to be scary. Remember, it’s designed to give you a fresh financial start and not keep you in a financial hole.