Your vehicle is one of your most important assets. Filing for bankruptcy can put your vehicle at risk, but a Tampa bankruptcy attorney helps you avoid problems.
What can you do to protect your vehicle when you file for bankruptcy?
1. Reaffirm Your Vehicle Loan
In a reaffirmation agreement, you and your attorney work with the vehicle loan lender to design an affordable repayment plan. This keeps the vehicle out of the bankruptcy.
Why would a lender agree to this?
Reaffirmation benefits you and the lender. They continue to get money from you on monthly car payments, but still have the freedom to repossess the vehicle if you stop making those payments. You don’t need to worry about losing your vehicle as long as you make your monthly payments.
2. File a Motion to Redeem
A motion to redeem is a court proceeding that gives you the power to purchase your vehicle outright. A Tampa bankruptcy attorney files the motion and if the court approves the motion, the vehicle loan lender must accept the payment. Once paid, you receive the title free and clear.
This is a good option if you have the cash available to pay off the loan and your vehicle’s value is greater than the amount you owe on the loan.
This option is only available for personal, family, or household vehicles.
3. File Chapter 13 for the Most Comprehensive Asset Protection
Chapter 13 gives you the most flexibility for asset protection. It also gives you the option of altering the loan terms on a vehicle. If you owe more than it is worth or you have a high interest rate, Chapter 13 lets you negotiate a “cram down.” This means you’ll pay less over the life of the loan.
You can learn more about how filing for bankruptcy affects vehicle ownership by scheduling a consultation with a Tampa bankruptcy attorney.
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