Are you interested in filing for Chapter 13 bankruptcy? If so, you may be concerned about the impact it will have on your car. Generally speaking, you are able to keep your vehicles in Chapter 13. Here is what you need to know:
- You must use your income to make back payments over time. With a repayment plan in place, you must repay some or all of what you owe. This typically lasts three to five years.
- Equity can impact your repayment plan payment. If you have an excess amount of nonexempt equity in your motor vehicle, this could increase your plan payment. The good thing is this: due to car depreciation, most people don’t have a lot of equity in their car.
- Is your car expense reasonable? This is not typically a problem, but is something to consider if you own a luxury vehicle. The court has the right to decide that a large payment on a luxury car is not a reasonable expense. For this reason, you may not be able to use the payment when calculating your disposable income.
Are you Prepared?
If you are filing for Chapter 13 bankruptcy and worried about keeping your car, you should become familiar with the three points above. When you understand what is expected of you, down to every last detail, it is much easier to make informed and confident decisions.
Most people who file for Chapter 13 find that they are able to keep their vehicle. This makes the entire process much easier, as they don’t have to worry about losing their car when they are facing such a difficult financial situation.
Do you still have questions regarding Chapter 13 bankruptcy and its impact on your car? If so, contact us for more information and professional guidance. We can help you better understand what to expect.