If you have lost control over your finances and find yourself behind in your debt payments, you may already know that you can apply for relief by filing Chapter 7 bankruptcy today.
You may, nonetheless, be concerned that if you file Chapter 7 bankruptcy, you will lose certain important assets, such as your car, which you and your family rely on for everyday life.
Fortunately for you, you don’t necessarily have to lose your car when you file Chapter 7 bankruptcy. Read on to learn how you can file bankruptcy in Muskogee and still keep your car.
File bankruptcy in Muskogee and keep your car
If you are behind in other debt payments, it is likely that you are also behind in paying your car note, and you may already be in danger of losing your car to repossession. However, when you file bankruptcy in Muskogee, an automatic stay of all collection activities against you will go into effect. This will suspend all creditor actions against you for the duration of the bankruptcy proceedings, including the repossession of your car, and it will allow you time to pursue a few different options for keeping your car.
Oklahoma Motor Vehicle Exemption
Chapter 7 bankruptcy will allow you several options for dealing with your car. First of all, if you happen to owe nothing on your car and it is worth $7500 or less, you can use the Oklahoma motor vehicle exemption to protect your car during bankruptcy. You are allowed $7500 per person or $15,000 per married couple for a single vehicle during bankruptcy. If your vehicle is worth more than the exemption allows, you will owe the court the difference. If you cannot pay the difference, the court can sell the car for what it is worth and give you back the exemption amount.
Secondly, it is a little known fact that, under Chapter 7 bankruptcy, you have the option of redeeming your car from the loan company. This means making a lump sum payment for what your car is worth, instead of what you actually owe on it.
This scenario is referred to as redemption, and it can be a huge benefit if you owe more for your car than what its worth, provided that you have the cash to do so. If you don’t have the cash, and it is likely that you won’t if you file bankruptcy in Muskogee, there are a number of financing companies that provide financing specifically for vehicle redemptions. You maybe able to find financing terms that allow you to keep your car and significantly lower your monthly car payments.
Reaffirming Your Auto Loan
Thirdly, if you can get caught up on your car payments and your income shows that you will be capable of making your payments after bankruptcy, you can reaffirm your auto loan by signing a reaffirmation agreement with your loan company. This will allow you to keep your car and continue to make the payments. However,if you do not make the payments in the future, your loan company will be able to employ whatever legal means at their disposal to collect the debt without the threat of you filing bankruptcy again for the next several years.
Surrendering Your Car
As a last resort, if you feel like your car isn’t worth what you owe or that you will not be able to make the payments even after you receive a discharge of your debt under bankruptcy, you can surrender your car to the loan company without having to pay anything else. You can then look for something affordable to get you and your family back and forth while you rebuild your credit and can qualify for a loan to purchase a better car.
Each of the options above has its advantages and disadvantages. Furthermore, because each bankruptcy case has its own particulars, there is no “one size fits all” solution. Ultimately, the choice you make to keep your car or not should take into account how much equity you have built up in the car and whether or not you can really afford to keep it. An experienced bankruptcy attorney can help you go over the options and choose a strategy that is best for you and your family, during and after you file bankruptcy in Muskogee.
Free Consultation: Muskogee Bankruptcy Attorney
Don’t let your financial problems get worse; get help today by calling the Wirth Law Office – Muskogee at (918) 913-0725, or toll-free at 1-(888) 447-7262 (Wirth Law) for a free consultation with an expert Muskogee bankruptcy attorney. If you prefer, you can use the box in the upper right corner to send us a short message.