Even if you are seriously struggling with your finances, you may be hesitant to sell your car for funds. This is because, for one, you may require your car to commute to and from your job, so that you may continue to earn wages that help pay off your outstanding debts. This is especially necessary if your residence or workplace is in an area where public transportation is scarce or otherwise inaccessible. However, even if you eventually declare bankruptcy, your fear of losing your car may remain prevalent. Continue reading to learn how to keep your car during your bankruptcy proceedings and how an experienced Louisville, Kentucky Chapter 7 bankruptcy lawyer at Schwartz Bankruptcy Law Center can help make this possible.
What are the chances of losing my car during bankruptcy?
First things first, your car loan is a type of secured debt. Meaning that your car serves as collateral if you are unable to make your monthly payments to the lender of your car loan. In an event like this, the lender of your car loan has the legal authority to repossess your car. In turn, you must understand that your bankruptcy trustee may not allow you to keep your car if you are behind on your monthly payments.
What can I do to keep my car during my bankruptcy proceedings?
Rest assured, there may be exceptions that allow you to keep your car during your Chapter 7 bankruptcy proceedings. For one, you may make an agreement with the Kentucky bankruptcy court in which you promise to pay off your outstanding car loans throughout the bankruptcy process. Though such an agreement may only be possible if you can prove the following as true:
- You may have to prove that you need your car to adequately support yourself and your family.
- You may have to prove that you can afford your monthly payments while simultaneously supporting yourself and your family.
- You may have to prove that you can remain current on your monthly payments during your bankruptcy proceedings.
Without further ado, other exceptions that may allow you to keep your car read as follows:
- You may be allowed to fill out and submit a reaffirmation agreement that must be signed off by the Kentucky bankruptcy judge.
- You may be allowed to reduce the balance to your car’s fair market value by applying for a post-bankruptcy loan with a new lender.
- You may be allowed to negotiate an alternative monthly payment plan directly with the lender of your car loan.
At the end of the day, the best way to protect your assets is to retain the services of a skilled Louisville, Kentucky consumer bankruptcy lawyer. So please do not hesitate to contact Schwartz Bankruptcy Law Center today.
