Chapter 5When should I file bankruptcy?
Chapter 6What do I lose if I file bankruptcy?
Chapter 8What can bankruptcy do for you?
Chapter 9What Does Bankruptcy Cost?
Chapter 18What About My Car in Bankruptcy?
Chapter 19What Happens to My House in Bankruptcy?
Chapter 20When Will Creditors Stop Bothering Me?
Chapter 23When do I stop paying my creditors?
Chapter 24Gas, cable, electric and phone bill
Chapter 26What Bankruptcy won't solve
Chapter 27Chapter 13 Debt repayment Plans
Chapter 28Will I be able to get credit again?
Chapter 29Bill Consolidation Loans
Chapter 30Bill Consolidation Scams
Chapter 31Wage Assignments, Deductions and Levies
Chapter 32Student Loans
Chapter 33Can I get rid of Taxes
Chapter 34NSF Checks, Traffic & Parking Tickets
Chapter 35Surrendering Real Estate & Time Shares
Chapter 36Business Bankruptcy
Chapter 37Professional Persons
Chapter 38Do you ever "Not Get" a Discharge?
Bankruptcy can be used to get rid of bad car deals, or help you to pay for a vehicle
you want to keep. You can buy a car on credit after filing bankruptcy, so you may want to dump a gas guzzler or high payment vehicle and get a cheaper one.
If you are like most people, your car is financed. The U.S. Department of Commerce estimates that, in 1991, the average cost of
owning a car that is financed is over $425.00 per month. The cost of owning a car includes the monthly payment, the interest lost
on the down payment or cash value of the trade-in, repairs and maintenance, depreciation (the amount the car goes down in value
every month), license and taxes, as well as gasoline and oil. I have seen more than a few people who are paying more for their car
than for their rent. If they were living in their cars, that would be a good idea!
Many people are suffering from "car fever" when they buy a
car. Dealers have relationships with finance companies that
allow them to finance any kind of deal. If you want to finance
a car with a bank or a finance company that has no relationship with
the dealer, the first thing a loan officer will do is look up the car
in a book which lists the value of the car. There are several
services which provide such information. Most finance companies
or banks that have no continuing relationship with a car dealer will
only loan you 70 to 80% of the average retail price for the same type
of car listed in the book. If you are paying more than the
average retail price, you will be able to get a loan based on the
average price similar cars are usually sold for, not on 75% of what you
want to pay.
does this mean to the average car buyer? It means that if you
are paying too much more than the usual price everyone else pays for
similar cars, the "average retail price", you will have to
put more money down. However, finance companies that have
regular relationships or agreements with car dealers will lend you
almost any amount, regardless of how much the car is really
worth. In other words, they will finance you for the price the
dealer got you to pay, not what the car is really worth.
that happens, often the car is worth less than you owe on it.
If the difference between what you owe, and what you could sell the
car for, is very great, you may want to give the car back to the
finance company. Then, you won't owe anything, and you can
start fresh and get another car.
you get another car, if you have filed a bankruptcy? This
depends on you. If you are filing a bankruptcy, your credit is
probably bad anyway right now. After you discharge your debts,
you won't have any payments to make, so you probably will be able to
afford reasonable car payments. If you put some money down,
many dealers will finance you again. Or, you can buy a used car
for cash. Or, for what you would spend on a car, you can take
cabs. The trick is to avoid getting into trouble on another
your car payments are reasonable, and you owe less than the car is
worth, or about the same, and you are up to date in your payments,
and the car is running good, you will probably want to keep your car
even though you are getting rid of the rest of your bills. This
is absolutely no problem. The finance company will be happy to
agree, generally, that your debt will survive the bankruptcy.
This is done in writing, and is called a reaffirmation.
you are behind in your payments, or don't have car insurance, finance
companies will seldom let you keep the car unless you cure those
problems. This is true even when you are not doing a
people come in to do a bankruptcy after the finance company has
repossessed the car because they didn't make the payments, or didn't
keep it insured. Sometimes I can get the car returned if they
bring the payments up to date, and get insurance, but most of the
time they are better off giving up the car.
situation where the car has already been repossessed, if you owe less
than the car is worth, it might be worthwhile investigating filing a
Chapter 13 debt repayment plan. This is a repayment bankruptcy,
and the payments can be restructured if your budget allows it.
Of course, Chapter 13 plans, in which you pay a payment to a
court-appointed trustee who sends it to your creditors, are always
more expensive than Chapter 7 bankruptcies.
you have a car that you own, and it is not financed, you need to have
me look at the exemptions allowed by law, to see if you could still
file a bankruptcy and keep the car, free and clear of any claims of
creditors. In Illinois, if the car is your main asset, and you
own it free and clear, and you are the only one on the title, we need
to see if you can keep it without having to do a Chapter 13. This may
not be a problem, however. I do many Chapter 7 bankruptcies,
especially for married people who own vehicles in joint tenancy,
where they have cars and keep them free and clear in a
bankruptcy. It all depends on your individual situation, and a
competent bankruptcy attorney can advise you about this.
Example: Ted wrecked
his car without insurance. The accident was his fault, and the other
driver is suing him. He still owes $6,000 on his car note, and now
the car finance company wants to be paid. His brother Bill has a 1989
Camaro. When he bought it, he traded in another car that was not paid
off, and his car note now includes money he owed on the old car, as
well as what he owes on the new car. Bill's car note is $457 per
month. He is current, but wants to give the car back and get a
"beater" so he can save some money.
friend Ralph is up to date in his car payments, has insurance, but
has a lot of medical bills and credit cards. He wants to keep his car
and get rid of the rest of his debt.
Peter Francis Geraci Chapter 7 or 13 Solution: Ted files a
bankruptcy and lists the other driver and their insurance company, as
well as his own car finance company. Any debts to them will be
discharged. He can save up some money, go buy another car, and no one
can sue him for the accident, so he won't lose his driver's license.
brother Bill surrenders his car, and doesn't have to pay a nickel
more. He now has no bills, and can save up to buy another car.
is getting rid of his hospital bills and his credit card debt, so now
he can afford his car payment. It is up to date, and the car is
insured, so he can keep his car even though he is getting rid of
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