You depend on your vehicle to get you where you need to go: work, school, errands and more. Unfortunately, there are things that happen that cause you to fall behind on your vehicle payments. If you are faced with the decision of whether to file bankruptcy or not, you are probably trying to figure out whether you should put your vehicle in there or not. Thankfully, there are a few options available to you when it comes to your vehicle and filing for Chapter 7 bankruptcy. Consider which one of these three options is in your best interest.
Redeem Your Vehicle
When it comes to redeeming your vehicle, you end up making one large payment to the creditor for what they deem to be a fair market value of the vehicle. For those who are able to afford this option, it will make things a lot simpler down the road. Not only did you eliminate your vehicle payment, but you also snagged the vehicle for a lot less than what you originally had to pay. Unfortunately, most people end up filing for Chapter 7 bankruptcy when they don't have a lot of spare cash around, so this isn't always a feasible option.
Surrender Your Vehicle
If you aren't able to continue making the normal monthly payment and you don't have the extra cash to redeem your vehicle, you can also choose to give the vehicle back to the creditor and discharge any remaining debt in the bankruptcy petition. For those who owe far more on the vehicle than what it is actually worth, this is often the best option.
See about Reaffirming the Debt
When you choose to reaffirm your debt, you will end up making payments on the vehicle the same as you did before you ever filed Chapter 7 bankruptcy. For those who make the decision to reaffirm their debt, you are essentially agreeing to make regularly scheduled payments on the loan for a second time. The creditor and you will have to come to an agreement on the payment amounts and due dates.
By speaking with your Chapter 7 bankruptcy attorney about which option is right for you, you can determine what is going to work the best for your specific financial situation. Don't ever assume that you are stuck having to deal with a vehicle payment that is more than you can handle. There are options available to you.Share