What Happens With Your Car or Truck in Bankruptcy
Chapter 7
After you file a chapter 7 bankruptcy, you may do with your car or truck whatever you choose if the vehicle has been completely exempted or, if not completely exempted, when the trustee informs you he has no interest in the vehicle. Your attorney will give you a good idea of the status of the vehicle after he has analyzed the financial and other circumstances applying to the vehicle. If you wreck the vehicle while you are in the Chapter 7, it will be up to you, your insurance company and the other person involved, if any, to deal with the situation. Unless the trustee has expressed an interest in the vehicle, it will not be necessary to contact your attorney. If however you have reaffirmed the obligation to pay the financing institution and the value of the vehicle is less than what is owed on it, the financing institution will expect you to pay the difference. NOTE: reaffirmation agreements apply to this situation.
Chapter 13
If you are in a Chapter 13, your cars and trucks are generally protected from repossession, unless you chose to surrender them. A Chapter 13 is often filed to stop repossession. In a Chapter 13, if a repossession sale is not complete, you may be able to get back your repossessed car or truck.
A Chapter 13 plan usually allows for you to repay or catch up your past due secured debt payments over the length of the plan along with your regular monthly mortgage payments, and keep your cars or trucks.
If you are in a Chapter 13 and you wreck your vehicle and the insurance company is going to pay for the damages, it is not necessary to notify the Chapter 13 Trustee or your attorney. If, however, the car is totaled you must contact your attorney's office. Prior to contracting the attorneys office you will need to have in your possession copies of the accident report, a copy of the declaration page of your insurance, the amount the insurance is going to pay in writing, and, if you plan to replace the vehicle, a written quote from a car dealer containing the price of the vehicle and the monthly payments. The attorney will then provide you with any further instructions as required.
Contact Us
For more information or to schedule a free office consultation with an experienced lawyer regarding a bankruptcy filing, please contact Daniels & Taylor, P.C. today.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
