How Does Filing Bankruptcy Impact Your Car and Home Loans?

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If you are considering filing bankruptcy, there are likely quite a few thoughts going through your mind. For example, what’s going to happen? Are you going to be able to keep your home? What will happen to your credit rating? Perhaps the most important one is, what is bankruptcy going to do to your car and home loans?

In most cases, working with a bankruptcy attorney in Florida is the best way to get answers to these important questions. However, some basic information can also be found here.

You May be able to Keep Your Vehicle

There are quite a few people who file for bankruptcy and are able to maintain ownership of their vehicle during the case, and in some situations after it. If you use the vehicle to get back and forth to work, then you have a much higher chance of getting to keep it. With that in mind, you don’t need to try and transfer the vehicle out of your name right before filing for bankruptcy. Not only is that dishonest, it is also illegal.

If you have gotten behind on your payments then you may be concerned about keeping it. However, there is still a chance you won’t lose it. You can actually use the bankruptcy laws to maintain ownership of your vehicle. The following information applies to vehicles that you own outright or that you are currently paying on:

  • Chapter 7 Extension: This works by stopping your vehicle from being part of a forced sale.
  • Chapter 13: This will allow you to refinance your loan or reduce the payments. It will also eliminate collection attempts and let you keep the vehicle.
  • Automatic stay: It will stop repossession efforts and will go into effect immediately after you have filed for bankruptcy.

What About Your Home?

Now that you know what will happen to your vehicle after a bankruptcy, what is the fate of your home? Are you going to still have a place to live? As with anything else during a bankruptcy case, there is no concrete answer. The court has the option to administer all the property after you file; however, if there is no equity in your home, it will likely not be sold. Also, a homestead exemption may result in you being exempt to the equity in your home, which will prevent the trustee from selling it. Keep in mind, each bankruptcy case is unique and has varying factors. You need to educate yourself about the process before you move forward.

There is no question that bankruptcy can seem a bit intimidating at first; however, it doesn’t have to be. When you are prepared, then you will be better off during the process and after it. Don’t worry, you have a number of options when it comes to your home and vehicle and the best way to take advantage of this is by working with a qualified bankruptcy attorney.

If you need help with your bankruptcy case, or have questions, contact the bankruptcy lawyers at the Badgley Law Group by calling 407-781-0420.

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