Filing for bankruptcy allows you the opportunity to reset your finances and start over. Getting rid of a majority of your debt may give you the resources and mental clarity to implement a new financial plan.
As you prepare to file for bankruptcy, you may feel uncertain about the fate of your assets. Your vehicle, for example, may plan an integral role in your everyday life. Knowing its fate can help you prepare for what is ahead.
Determining factors
The type of bankruptcy protection you file for will impact what happens to your personal vehicle. According to Experian, you may need to give up your car in Chapter 7 bankruptcy since it is an asset. Your vehicle may be at an even higher risk of repossession if it is an expensive one. Under some circumstances, you may be able to put the equity you have in your vehicle toward your bankruptcy settlement, but continue to maintain ownership so long as you are up-to-date on loan payments.
In Chapter 13 bankruptcy, you have the opportunity to renegotiate an alternative payment plan with your lender if you still owe money on your vehicle. In this situation, you may have a higher chance of keeping your vehicle so long as you comply with the contingencies given to you by your lender.
Identifying options
Officials will analyze your car’s value and how much money you still owe on your vehicle payment plan. Accounting for state laws and the type of bankruptcy protection you file for, officials will make a decision and notify you.
If you do need to give up your vehicle, you may consider using public transportation until you can secure another vehicle. You could also ask family members for help getting to where you need to go, rely on ridesharing services or borrow a vehicle from someone.
