Photo by Clem Onojeghuo on Unsplash If you’re even considering bankruptcy, consider taking some actions which seem to go against common sense, including about your possessions. Last week we made the point that if bankruptcy is even a possibility for you, please quickly get legal advice. We said when considering bankruptcy you should get legal advice to find out: if … Read More
File bankruptcy before your lender takes your vehicle. But if you couldn’t, bankruptcy may still get back your just-repossessed vehicle. When Does a Lender Repossess a Vehicle? When CAN a vehicle lender repossess your vehicle? Just about all vehicle loan contracts let the lender repossess the minute you are late on a payment. There may be a legal grace … Read More
Bankruptcy gives you immediate and long-term relief from your creditors. But there are many other unexpected benefits of bankruptcy. The next 12 blog posts will be about some of the most powerful and surprising benefits of bankruptcy. You’re likely considering bankruptcy because you need financial relief. You need immediate relief from debt collection pressures. You need long-term relief from having to pay … Read More
In theory the terms of a reaffirmation agreement are negotiable. But many creditors require you to be current on the debt to reaffirm it. Two blog posts ago we introduced reaffirmation agreements, and in the last one we discussed their risks. Today we get into what happens if you are not current on a debt that you want to … Read More
Reaffirmation of a secured debt, like a vehicle loan, can be a great way to keep the vehicle or other collateral. But know the risks. Last time we introduced reaffirmation agreements as a good way to keep collateral like a vehicle under Chapter 7. Essentially, you get to keep the vehicle or other collateral in return for agreeing to … Read More
If your vehicle is worth less than you owe on it, with good timing cramdown could reduce your monthly payment AND the total amount you pay.
Chapter 13 vehicle loan cramdown solves a number of serious practical problems that even Chapter 7 “straight bankruptcy” can’t.
If you’re buying a vehicle, sometimes getting out of the contract is your best option. Chapter 7 lets you do that, owing nothing.
In a Chapter 7 case you “reaffirm” your vehicle loan if you want to keep your vehicle. This means you keep paying it.
Getting out of a vehicle lease by “rejecting” it in Chapter 13 isn’t quite as quick as in Chapter 7 but has about the same practical effect.
Although Chapter 7 can work fine if you’re current on your lease, use Chapter 13 instead if you’re behind and need time to catch up.
You can most likely “assume” your vehicle lease and keep that vehicle under Chapter 7. But you need to be current or able to be quickly.
If you want secured creditors to be paid in your Chapter 13 plan, they must file proofs of claim. Let’s use the example of a vehicle loan.
Chapter 13 gives you powerful ways to hold onto a vehicle, but it also lets you give up that vehicle without paying its debt.
A vehicle lease can cost you less up-front and each month, but is in reality very expensive. Bankruptcy is your way to break the contract.