Can I Keep My Car If I File for Bankruptcy?

Declaring bankruptcy is an overwhelming and complex process that can have far-reaching consequences on your financial health, including the ownership of your assets such as your car. Understanding how filing for bankruptcy may affect your ability to keep your vehicle is crucial for individuals facing financial difficulties in Roanoke, Virginia.

Filing for Bankruptcy in Roanoke, Virginia

Bankruptcy laws vary by state, and in Virginia, individuals typically file for two main types of bankruptcy: Chapter 7 and Chapter 13. The type of bankruptcy you qualify for and choose to file will impact whether you can keep your car.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also known as liquidation bankruptcy, involves the selling of your non-exempt assets to pay off your debts. In Virginia, there are exemptions that protect certain assets from liquidation, including a vehicle. However, the value of the exemption may vary, and if your car exceeds the exemption amount, it may be sold to repay your creditors.

It is crucial to understand the Virginia laws governing bankruptcy exemptions, including the personal property exemption (Va. Code Ann. §34-26), which can impact whether you can retain your vehicle during a Chapter 7 bankruptcy.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, on the other hand, involves creating a repayment plan to pay off your debts over a period of three to five years. In this type of bankruptcy, you may be able to keep your car as long as you continue making payments according to the court-approved repayment plan.

Under Chapter 13 bankruptcy, you are required to propose a repayment plan that includes the value of your car and ensures that the vehicle loan is satisfied within the plan’s duration (Va. Code Ann. §34-26). It is essential to work with a qualified bankruptcy attorney to navigate the intricacies of Chapter 13 bankruptcy and retain ownership of your vehicle.

Options for Keeping Your Car

When filing for bankruptcy in Roanoke, Virginia, there are options available to help you keep your car. Understanding these options and the implications on your car ownership can be critical in making informed decisions about your financial future.

Reaffirmation Agreement

One option to keep your car during bankruptcy is to enter into a reaffirmation agreement with the lender. A reaffirmation agreement allows you to continue making payments on your car loan and retain ownership of the vehicle. However, it is essential to carefully consider the terms of the agreement and ensure that you can afford the payments before entering into such an agreement.

Redeem Your Car

Another option available in Chapter 7 bankruptcy is redemption, where you can pay the lender the current value of the car instead of the total outstanding loan amount. This option may help you keep your car at a more affordable cost, but it requires a lump-sum payment, which may not be feasible for everyone.

Exemption Planning

Working with an experienced bankruptcy attorney in Roanoke can help you navigate exemption planning to protect your assets, including your vehicle. By understanding the applicable Virginia bankruptcy exemptions and strategically utilizing them, you may be able to retain ownership of your car during bankruptcy proceedings.

Consult a Bankruptcy Lawyer in Roanoke, Virginia

Understanding the impact of bankruptcy on car ownership in Roanoke, Virginia, requires a comprehensive knowledge of state and federal bankruptcy laws. Navigating the complexities of bankruptcy proceedings and protecting your assets, including your vehicle, can be challenging without legal guidance.

If you are considering filing for bankruptcy and have concerns about keeping your car, it is advisable to consult with a skilled bankruptcy lawyer in Roanoke. A knowledgeable attorney can assess your unique situation, explain your options for retaining your vehicle, and guide you through the bankruptcy process in compliance with Virginia laws.

Remember that bankruptcy is a complex legal process with long-lasting implications, and seeking professional legal advice is essential to protect your rights and assets throughout the bankruptcy proceedings.