index page

car loan in bankruptcy

Date: Mon, 12/13/2010 - 02:53
Submitted by on Mon, 12/13/2010 - 02:53
Posts: 202330
Credits:
[Donate]

My brother and sister-in law have 2 cars. My brother has purchased his car in November 2008 and my sister-in-law in 2009. My brother pays $500 on the car loan each month. He still owes $30,000 on the car loan. My sister-in-law owes $15,000 on the loan. They are planning to file bankruptcy. I have 2 questions in this regard:

Can they keep their cars with them? If yes, then how?
Can they get lower loan payment?


A lot will depend on what state they live in and if there is any equity in the vehcicles and what the state exxemptions are. As for lowering the payments, they would have to refi the vechicles which if they are planning on filing bankrutcy isnt likely to happen.

Personally I would be walking away from $500 car payment and looking for more affordable wheels. No to mention the fact the courts may not allow it to remain exempt.


Submitted by SOAPLADY on Mon, 12/13/2010 - 03:32

SOAPLADY

( Posts: 17315 | Credits: )


If your brother and sister-in-law file Chapter 13, then they will get a repayment plan from their creditors. If they pay as per the repayment plan, they will be able to save their cars. However, if they file Chapter 7, they need to check out the exemption limits in case of vehicles as per their state laws. If the value of the cars are less than or equal to the exemption limit, then they will be able to save the vehicles. However, if the value of the cars exceed the exemption limit and have equity in them, then the trustee can order the sale of the vehicles. They will get back the exempted amount and the rest of the money will be used to pay off their creditors.


Submitted by Anna Sweeting on Tue, 12/14/2010 - 23:14

Anna Sweeting

( Posts: 1827 | Credits: )