Bankruptcy and Your Car or Vehicle

Our Washington State bankruptcy attorneys can help you understand your options when it comes to your car or vehicle.

In the vast majority of cases, it is possible to keep an automobile after filing bankruptcy in Washington State. In a Chapter 7 bankruptcy, if the car is paid off, you can still exempt over $3,000 to protect it from your creditors. You also have a federal wildcard exemption that could protect up to $11,975 more if necessary. Connect with our Seattle bankruptcy lawyers to see how we can help you stop repossession of your car today!

Our Seattle bankruptcy lawyers will help you craft your exemptions.

You should talk to our Washington State bankruptcy attorneys to get advice on how to craft your exemptions, especially if you have a car that is paid in full. It is easier to protect a paid in full car in a Chapter 13 bankruptcy. If you cannot cover the car’s value with exemptions, you can pay enough to unsecured creditors to cover the part of the car’s value that you cannot exempt.

If you are making payments on a car, you have to continue making the payments in a Chapter 7 bankruptcy to keep the car. The car finance company will want you to sign a reaffirmation agreement, which keeps the car loan from being discharged. The bank can legally repossess the car without a signed reaffirmation agreement though many banks will allow you to keep it if you just stay current.

Signing the reaffirmation agreement puts you at risk. If you sign the reaffirmation agreement and later default, you could be liable for any deficiency between the total loan balance and what the auction price of a car. For that reason, you should think carefully about signing a reaffirmation agreement. Our Seattle bankruptcy lawyers in Washington State can help you make an informed decision regarding this.

Filing a Washington State bankruptcy gives you options regarding your car or vehicle. Our Seattle car repossession attorneys can help.

Another option in a Chapter 7 bankruptcy is a redemption. To redeem a car, you can pay the bank the value of the car and discharge the rest of the loan. If you can’t come up with the cash to do that, there are finance companies that specialize in loaning redemption funds to people in Chapter 7 bankruptcy.

Of course, one option is simply giving the car back, or surrendering it, in a Chapter 7 bankruptcy or a Chapter 13 case. A Chapter 13 bankruptcy allows you to consolidate the car loan with the rest of your debts. By spreading the car loan out for as much as 5 years, you may be able to lower your &monthly payment significantly. You can pay a lower interest rate in a Chapter 13 bankruptcy. The Washington State bankruptcy attorneys from our Seattle law firm can answer your questions to see if this is the best option for you.

If the car was purchased over 910 days ago, you can “cram it down” or lower the balance of the loan down to the value of the car. For title loans or other “non-purchase money security” loans attached to cars, you can cram the car down even if the loan was taken out less than 910 days ago.

Seattle bankruptcy lawyer, Erin M. Lane and her team can give you the proper legal guidance you need.

Whenever you are making payments on a car, the bank will require that you keep full coverage insurance. That is still the case whether you file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. With either case, contacting our Seattle vehicle repossession lawyers in Washington State for proper legal guidance is a smart move.

Call our Seattle vehicle repossession lawyers today.

Our Washington State bankruptcy attorneys are here to help! We offer affordable low flat fees. Take the first step by calling our Seattle vehicle repossession lawyers today for your free consultation:

(206) 686-6399