Bankruptcy is often seen in popular culture as a last-resort option for people who have been careless with their money. In reality, as some Florida residents can attest, insurmountable debt can come from a variety of sources, including unexpected costs like medical bills. Regardless where the debt comes from, Chapter 7 bankruptcy is a viable solution for those who cannot carry debt further. However, many people wonder whether it is possible to weather a bankruptcy without losing certain assets. It is.
In Chapter 7 bankruptcy, assets are typically liquidated to pay down creditors. While some assets are considered exempt from liquidation, large assets like houses and expensive cars often are not. However, many people would choose to keep their vehicle rather than surrender it to the lender. There are two ways to go about this.
Redemption is the first option. In a redemption, a debtor pays the lender the full value of the car in a lump sum. This, of course, only works for people who have this money on-hand; otherwise the lender will likely proceed with the repossession process. The other option is reaffirmation, a process that involves discussing multiple payment options with the lender to work out a mutually satisfactory payment plan. This may allow for the debtor to keep the car from being liquidated, while paying down the remaining debt owed over time.
Not every option works for every situation. Florida residents facing serious financial problems are encouraged to seek out the support of an experienced bankruptcy attorney to walk them through their options, including Chapter 7 bankruptcy. With the help of a seasoned professional, the road to financial stability can be more easily traversed, even by those with overwhelming debt.
Source: autocreditexpress.com, “Can I Keep My Car in a Chapter 7 Bankruptcy?“, Megan Foukes, Accessed on May 8, 2018