It depends on your specific situation but yes there is a possibility to keep your car even after you file for bankruptcy. A bankruptcy law firm in Cleveland will guide you on how you can benefit from several bankruptcy laws in place that let you keep your vehicle as long you continue to make regular payments on it. Going into the details of things, here is what all can happen in the context of keeping or surrendering your vehicle after filing for bankruptcy.
Sign a Reaffirmation
By signing a reaffirmation agreement, you can continue making payments on the vehicle just like before. You should reaffirm the debt on your car only if you are sure that you will be able to pay regularly towards it. In case you default, the creditor can take the same action against you as mentioned in the debt contract as though you never filed bankruptcy. Debt collection as a consequence of a default happens through a lawsuit and garnishment among other means.
Redemption with Lump-Sum Payment
Redeeming your vehicle after bankruptcy means paying a lump-sum on the current value of the car you own. This way, you have to pay overall a much lower amount than you would end up paying by installments otherwise. However, arranging for the lump-sum amount may be difficult for most individuals filing for bankruptcy. A good bankruptcy attorney in Cleveland can give you a viable solution around this.
Continue Paying Your Creditor as Before After Your Bankruptcy
If you want to continue making payments on your debt without signing a reaffirmation, you can, but it comes with the risk of having to forgo your vehicle should the creditor choose to repossess it. Under bankruptcy laws, a creditor can lawfully repossess their collateral if the person filing for bankruptcy has not reaffirmed. However, the likelihood of it is low, because, in case they repossess, the creditor will get a much lower value for the asset at an auction than the amount you would pay them towards the debt. So if you are sure you can make all the payments with no possibility of defaulting, you can choose to go this route for retaining your vehicle.
Surrender the Car
If nothing else seems feasible, surrendering your vehicle to the creditor may be the only option. In this case, you won’t need to pay anything other than the portion of the debt you have already cleared to the creditor.
Get the right Guidance from Bankruptcy Attorney Cleveland
You need to tread very carefully with all your financial decisions once you file for bankruptcy. Even a small glitch here or there can cost you a lot. Therefore, it is best to seek professional guidance from a trusted bankruptcy law firm in Cleveland in the context of how to retain your car after filing for bankruptcy. Rubinstein Law Firm in Cleveland has years of experience in dealing with bankruptcy cases and has helped thousands of individuals lawfully retain their assets in spite of bankruptcy.
Consult a bankruptcy lawyer for expert advice regarding your specific situation.