Bankruptcy and its Impact on Your Vehicles

If you are considering filing bankruptcy, then call a bankruptcy lawyer in Savannah Georgia to learn how bankruptcy will impact your vehicles.

Once you file for bankruptcy there are a variety of decisions of varying levels of difficulty, as to what should be done with assets and properties that you own. The fate of your automobile is one such problem. It is commonly observed that people filing for bankruptcy usually own cars. Thus you can decide to surrender the vehicle in bankruptcy. There are a specific set of rules to be followed in the event of your electing to surrender your car.

To begin with, you need to inform bankruptcy trustee if your intention through the written word. This notification has to be given prior to the creditor’s meeting. It is during the creditor’s meeting that you would be meeting with your creditors to whom you owe money in presence of court appointed trustee. If you take a proactive stance with regard to surrender of your vehicle, you can enter into a surrender agreement during the creditor’s meeting.

You need to meet with the lender who extended the loan for your vehicle or car and inform him about your decision to surrender you vehicle to bankruptcy. You can decide with lender date when you would be able to do the same. The surrender agreement form has to be obtained from bankruptcy trustee’s office or from lender who provided finance for your car. The form has to be filled in accurately, reviewed and signed. Copies of surrender’s agreement have to be handed over to trustee and auto lender and do not forget to save a copy for self. 

Leased Vehicles

If your vehicle is leased, you might want to know rules regarding leased vehicles in a bankruptcy.

Leased vehicles can be included in both chapter 7 and chapter 13 bankruptcies. But it should be noted that payments for the lease cannot be made through the repayment plan in a chapter 13 bankruptcy. Instead, you might have to reaffirm lease with lender and institute one with lesser amount and pay it outside bankruptcy plan if you want to keep vehicle. If you decide to keep the vehicle you will have to continue making lease payments to avoid repossession and if you reject lease and dispose off vehicle, you will have to pay difference of sale amount of vehicle and lease contract balance.

In a chapter 7 bankruptcy, you will need to reaffirm lease to keep your vehicle or it will be sold and proceeds use for repayment of lease balance. On reaffirmation of lease, timely lease payments will have to be made. On the other hand, if your surrender you vehicle, you are no longer obligated to pay amounts owed on lease.

The bankruptcy exemption law allows a family to retain one automobile during filing of bankruptcy.

Contact a seasoned bankruptcy attorney in Savannah if you need debt relief assistance or want to file bankruptcy.