Chapter 13 is a great way to reorganize your debts and repay over an extended period of time. If you have a financed vehicle, it can be made part of the Chapter 13 states Elk Grove Village bankruptcy attorney. In order to describe in detail, let’s examine what happens to a car payment if the auto is financed?Well, if your auto is financed and you still have to make a payment on your car in order to get title, there are a couple things that happen in bankruptcy with that car payment. First let’s go into filing Chapter 7 bankruptcy. In a Chapter 7 bankruptcy, you would have to reaffirm the debt to the finance company. This is what’s called a Reaffirmation Agreement. What that means is you are essentially signing documents that are a reaffirmation of the debt, the contract, the terms of the debt and the collateral of the debt. So Chapter 7 will allow you to keep the car as long as you can make your payments for that car. However, in Chapter 7, you have the Illinois bankruptcy case option to let go of the car and you will not have any personal liability to pay back that debt because that debt will be discharged in bankruptcy.
In a Chapter 13, you would have the option to pay the amount of money that you owe to the trustee in your Chapter 13 payment plan. So you will once again be able to keep your car but you would have to make sure that payment is in your Chapter 13 plan. The other option is to pay it outside of your bankruptcy Chapter 13 repayment plan, however, generally attorneys would advise to put the car payment into the Chapter 13 payment plan per month.
So the car payments and your car will be able to be kept by the debtor. In order to keep the car in a Chapter 7, you would have to assign what is called a Reaffirmation Agreement. And in Chapter 13, your auto payments would be in the Chapter 13 payment plan per month. I know that this material can be complex to get the handle on. For the best solution, speak to a bankruptcy attorney who practices bankruptcy on a daily basis. That attorney will be able to guide you through the process and make sure that you feel comfortable with all that needs to be done in a bankruptcy case. If you need to find a bankruptcy lawyer, check with your local bar association or search the internet.