It’s a question we hear all the time – after a client files their bankruptcy case, they ask us “Should I keep my car?”
Many times, if you’re filing for bankruptcy, you’ve been struggling with debt for quite a while, so it’s likely that you were behind on car payments. Now that the bankruptcy case is filed, you’re wondering if keeping the car is a good choice to make.
In most cases, your car is an absolute necessity – you’ve got to use it to get to work, or to handle everyday errands. In some cases though, the amount owed on your auto loan might not make sense after your bankruptcy case.
Questions like this are the perfect example of why you need an experience bankruptcy attorney in your corner. If you’ve filed with us, we’re already going to be familiar with all the details of your financial situation. If you haven’t filed yet, it’s our job to take the time to talk to you and fully understand your debts and the options ahead of you.
Either way, we’ll help you understand what’s at stake. If you decide to keep your vehicle, we’ll help you understand the steps you might need to take. We’ll make sure you understand all of the angles so you can make the right decision for your unique situation.
We’ll walk you through the following considerations:
How much is the car worth and what do you owe?
It’s important to compare the amount you owe for your auto loan to the amount your car is actually worth. If you’re “upside down” on your loan (you owe more than the car is worth), it might not be a good idea to keep your car when you’re trying to get a fresh start financially.
How long will it take to pay off your car?
If you’ve got a longer loan repayment schedule, statistics say you’re more likely to default after bankruptcy. You don’t want to put yourself at risk – if you’ve got more than 2 years of payments left, you might want to let your car go…
Does your lender insist on a reaffirmation agreement in bankruptcy?
If you have to sign a reaffirmation agreement, you’ll be legally liable for the auto loan even after your other debts are discharged in your bankruptcy case. You’re trying to start over, so this could be a huge risk. If you find yourself unable to pay, you’ll be liable for any balance after they repossess and auction your car.
Ultimately, we’ll help you decide what’s best
Regardless of whether you decide to surrender your vehicle or protect it in your bankruptcy case, our team will be there every step of the way to help you navigate the bankruptcy process. If you’ve got any other questions about keeping your vehicle or bankruptcy in general, call us today at 214-760-7777 and one of our bankruptcy attorneys will be happy to assist.