Protecting Your Vehicle in Chapter 7 Bankruptcy
In some situations, the Chapter 7 bankruptcy process involves surrendering property to the bankruptcy estate to be sold in a liquidation of assets by an appointed trustee, with the proceeds going towards the repayment of creditors. This can leave the debtor without access to their vehicle and unable to get to and from work, something that is often an unacceptable solution for the filer. Fortunately, the bankruptcy system offers a number of options to avoid liquidation that will allow you to file for Chapter 7 bankruptcy, discharge your debts, and keep your car all at the same time.
At Hong Law, PLC, we have decades of experience assisting debtors in all manner of debt situations to come to effective solutions through the bankruptcy system and, as such, can help you settle virtually any debt scenario. To learn more about your rights and options for relief through the bankruptcy system, call our skilled Cedar Rapids bankruptcy attorneys today at (319) 294-5853.
How to Save Your Car
In order to prevent losing your car in the process of Chapter 7 bankruptcy, there are a number of legal options you can exercise. The following are a few examples of potential means of protection:
- Exemption – If you own your vehicle outright you must exempt the value of the vehicle in order to keep it. In Iowa, you may exempt up to $7,000 in the equity of a vehicle, and an additional $1,000 of value using the Iowa wild card exemption. If your vehicle is worth more than $8,000, you will be unable to exempt it and may have to surrender the vehicle.
- Reaffirmation – By entering into a reaffirmation agreement with your car loan lender, you will be able to continue making payments without discharging any of the debt you owe on the vehicle and retain ownership after the bankruptcy.
- Redemption – In the event that your vehicle is worth less than you currently owe your lender, you may settle with the lender for the value of the vehicle and discharge the remainder of your debt. Although the lender has the right to contest the value of the vehicle, they may not decline the redemption.
Utilizing any of these options may help you to retain ownership of your vehicle after you complete your Chapter 7 bankruptcy.
No matter how burdensome your debt situation may seem, the skilled Cedar Rapids bankruptcy lawyers at Hong Law, PLC, can help you to navigate the bankruptcy system and regain a measure of financial independence. For a free consultation to discuss the details of your case, call us today at (319) 294-5853.
Coralville, IA 52241
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