How To Declare Bankruptcy And Keep Your Car
In Colorado you can file for a Chapter 7 or a Chapter 13 bankruptcy depending on your income and the amount you owe. One of the main concerns people that want to file for bankruptcy have is that they may lose their car. Fortunately, you are unlikely to lose your car if you did not secure the loan with your car. But if you are behind on your car payments, you may be able to avoid repossession with the help of an experienced bankruptcy lawyer in Colorado.
Colorado Vehicle Exemption
Colorado exemption laws list property that a Chapter 7 or Chapter 13 bankruptcy protects. The law allows you to keep up to 7,500 in equity in the motor vehicles you won, but that amount rises to 12,500 if you or your spouse is disabled or over 60 years old. But if you use the motor vehicle to get to and from work, then the motor vehicle will be considered as a tool of trade, which means you get to keep up to $30,000 in equity in that vehicle. Talk to an experienced bankruptcy lawyer in Colorado if you are thinking of filing for bankruptcy.
Random YouTube Video No Association With This Website
What Will Happen To Your Car Under A Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy will actually wipe out all of your dischargeable debts, which includes debts you owe on your home and your car. In case you owe money on your car when you file for a Chapter 7, you can give back the car to your creditor, sign a reaffirmation agreement with the creditor, or continue paying on the debt without a reaffirmation agreement. When you give back the car, you no longer have to pay anything to the creditor.
But choosing to sign a reaffirmation agreement puts you at great risk because it makes you responsible for the debt despite the bankruptcy discharge. Choosing to pay on the debt without a reaffirmation agreement is choosing to pay on a debt that you no longer owe. But lenders will sign the vehicle’s title over to you if you pay the full amount for the car that you owed before the bankruptcy.
Can You Keep Your Car After Chapter 13 Bankruptcy?
As long as you have not used your car as collateral for the debt and the equity in your car is fully exempt, you can keep your car after filing for a Chapter 13 bankruptcy. Filing a Chapter 13 also allows you to reduce car payments in your Chapter 13 plan. In fact, all your debt payments are combined into a monthly payment that you can afford. These payment plans can last from 3 to 5 years. At the end of the payment period, the remaining debt can be discharged so that you can have a fresh start. To keep a car that is collateral for the debt, you can agree with the creditor to keep making payments on it until it is paid in full. Talk to an experienced bankruptcy lawyer about exempt and non-exempt property when you are thinking of filing for a Chapter 7 or a Chapter 13 bankruptcy.