Cars and Bankruptcy in Federal Way
For most folks living in Federal Way, a car is an every day necessity. You likely use your car to get to work and perform all sorts of errands throughout the day. Without your car, would you be able to live your life? Fortunately, bankruptcy laws recognize the importance of personal vehicles, so exemptions up to a certain dollar amount were added that protect automobiles from seizure, in most cases.
If fear of losing your car is preventing you from seeking debt relief in the form of bankruptcy, talk to one of our Federal Way car repossession lawyers and get the facts. Bankruptcy offers a means of eliminating debt while allowing you to maintain your dignity and ability to earn a living. If keeping your car is vital to your survival, our King County bankruptcy lawyers will help you explore your options in an effort to find a solution.Understand your legal rights in regards to vehicles and bankruptcy
- If your car is paid for, our Federal Way lawyers will outline bankruptcy exemptions that protect it from seizure
- If you're still paying on a car loan, maintaining ownership is possible if you continue making your monthly payments
- Redemption is a process that allows you to keep your car that is acting as collateral on a secured debt, but you must reimburse the creditor for the current value of the car
- Chapter 13 bankruptcies allow for the consolidation of debt in a payment plan, which is another way you can maintain ownership of a vehicle
Federal and state exemptions are included in bankruptcy laws, and these can be used to protect a vehicle from seizure or repossession. The federal "automobile exemption" protects $3,500 of a car's value. There are also two "wildcard" exemptions; one from the federal government totaling $11,975, and one from the state totaling $3,000. If your car is paid for you can use these exemptions. Married couples are also allowed to "stack" exemptions for even greater relief.
If you're still making monthly payments on your vehicle, maintaining payments allows you to retain ownership. However, this may not be possible if you're really struggling to pay bills. Some lenders may allow you to "reaffirm" the loan, which basically withdraws your automobile from the bankruptcy. This option should be carefully considered, because the goal of bankruptcy is to discharge debt and set yourself up for success when the process is completed.Your Federal Way bankruptcy lawyer can help you stop car repossession
If your automobile was used as collateral for another loan, bankruptcy law allows you to pay back the lender the current value of the vehicle so that you can keep it, essentially releasing it as collateral. This process is called redemption, and requires a court motion. If the value of the car is less than the amount secured, the lender may dispute the value of the car. Resolving this issue may require negotiations.
With Chapter 13 bankruptcy, your car debt may be consolidated with the rest of your debt, and paid off in three to five years. You're allowed to "cram down" a loan if 30 months have passed since you purchased your vehicle. This allows you to pay back a portion of the loan covered by the car's full value, plus interest. This can save a lot of money.A Federal Way bankruptcy attorney is ready to help answer your car related questions
Contact our law office in Federal Way and find out whether you can keep your car after filing for bankruptcy in Washington State. Your Federal Way car repossession lawyer will explain your options, and your consultation is free.