It is a bold step to take, but sometimes filing for bankruptcy is the best move a person can make. Doing so can bring one out of financial ruin and put them on the road to recovery. A frequent question among those filing for bankruptcy concerns their vehicle. Can a car be kept if a person files for bankruptcy? The answer to this issue depends on many factors.
Where Do You Live?
Certain states will require a vehicle owner to pay off the balance of a car in order to keep it. Florida is one such state. In other states, other rules and regulations determine whether or not you can keep a vehicle if you file bankruptcy.
Is There a Lien on the Title?
If you have an existing loan on your vehicle, your title will have a lien on it. The lien holder will have the right to take possession of the vehicle if you do not make payments. Each state will have different rules, but for the most part, arrangements will need to be made with your lender to continue making the payments. In many cases, those who continue making their regular payments can keep their vehicles even when they file for bankruptcy. The same holds true for a car title loan. Embassy Loans has provided thousands of car title loans to customers in need of emergency money. The company places a lien on the title to the vehicle being used as collateral. Again, if you are a Florida borrower, you will need to pay off the balance of the title loan to keep the car in a bankruptcy situation.
What Is the Value of the Vehicle?
Often, keeping your vehicle may depend on its value. If your car is several years old and has thousands of miles on it, it may not be worth as much as a newer one. A bankruptcy judge can order you to sell your vehicle if it is deemed necessary to pay off your debts. If you have a relatively new car in good shape that is worth $25,000 for example, you may be ordered to sell it off with a view to paying off other debts. Typically, your car or truck would be appraised by someone who is a professional, and the vehicle would then be sold. Of course, it is best to consult with an experienced bankruptcy attorney to find out exactly what you must do if you do choose to file.