How Much Will I Have To Pay To Keep My Car In Bankruptcy?
Most people can’t go without their car for very long, if at all. Unless you have other reliable modes of transportation, or are able to take public transport, your car is how you take your kids to school and get to work. If you are not able to go to work every day, you will probably not keep your job for long. Without a job, it is hard to make any money and this can make it even harder to pay all of your bills. So if you are already having a hard time meeting your monthly expenses it is critical to find a way to keep the things you need to stay on top of your daily responsibilities. One solution is to file bankruptcy, which can reduce the amount you pay for most all of your debts.
Examples Of Debts That Get Paid During Bankruptcy
When you file for bankruptcy, there are certain debts you no longer have to pay and there are other debts you can pay less than what you owe. Here are some examples:
- In a Chapter 7 case you do not have to pay most unsecured debts and this gives you more money each month to pay for other things, like your car. When you decide to keep your car during a Chapter 7 bankruptcy, you can do so by reaffirming the debt, which is like a new contract for the debt. In some cases the lender will agree to let you reaffirm a lower amount, or at a lower interest rate. Whatever the terms of your reaffirmation agreement are, that is how you will repay your auto loan during bankruptcy.
- In a Chapter 13 case you come up with a plan of repayment, and the good part about this is that with cars you only have to pay what the car is worth instead of what you owe. You can also pay this amount at a lower rate than what you agreed to when taking out the auto loan, and this can result in a much lower car payment. If your car payment goes down, you save money each month and get a little relief from burdensome debt.
How Your Car Payment Is Impacted By Bankruptcy
It is important to remember that if you reaffirm a debt in a Chapter 7 case, the debt will still be due after your case is over. But, with a Chapter 13, you no longer have to make payments for your vehicle when your case is finished. If you are not sure which option is best for you, call us to learn more.
For more information about how pay for your car during bankruptcy, contact us at https://www.sacramentobankruptcyattorneys.com/. We will help by coming up with solutions that work for you.