Digging out of debt can be a daunting prospect. Doing it without your car can be nearly impossible.
In the United States, most people rely on their cars to get to and from work. If you lose your car because of financial trouble, it makes it that much harder to make ends meet. The good news is that most people are able to keep their vehicles through the bankruptcy process. The Turnaround Team can help you understand your options in bankruptcy regarding your car. Let us help you.
One Vehicle Exemption in Bankruptcy
In an Arizona bankruptcy case, there are assets that can’t be taken by the bankruptcy trustee to pay back your creditors. A single person gets a $6,000 exemption for one vehicle. That means that if you have $6,000 or less in equity in your vehicle, you are allowed to keep that vehicle. If you are married, the exemption doubles. Equity means the amount the car is worth, minus the amount you still owe on the vehicle.
– Brian M. Blum, Managing Attorney
Facing the fact that financial troubles are out of control is not easy. One of the triggers for many people is the threat of losing a home or vehicle.
Unlike credit card debt, which is generally unsecured, car loans have the vehicle to serve as collateral. If you don’t keep up with your car payments, the lender can repossess your car. If you think your car is about to be repossessed, the time to act is now.Get a Free Bankruptcy Consultation
Filing for bankruptcy prevents most of your creditors from pursuing collection efforts, including repossession. This is known as the “automatic stay” and gives you time to go through the process without creditors pressuring you. Once you have filed for bankruptcy, even if you owe back payments, your car will not be repossessed. That said, you must still make payments based on the depreciation of your car during bankruptcy. The amount of these payments is something you should discuss with a bankruptcy attorney.
If your car is repossessed while you are planning to declare bankruptcy, you may be able to get it back. You must act quickly to have the car included in your bankruptcy plan. Still, it is better to take action to address your debt before default on your car loan.
Contact Our Bankruptcy Lawyers
Give The Turnaround Team a call today to discuss your concerns about your car loan and the bankruptcy process. You can reach us at (480) 420-1999. You can also contact us online. We will answer your questions and explain your options in protecting your vehicle.