Cars and Bankruptcy in Seattle
Your car is one of your most vital assets. In Seattle, owning a car is virtually a necessity, especially if you commute to work or have kids that have to be dropped off and picked up from school. The law recognizes the importance of personal vehicles, so they are protected up to a certain amount during bankruptcy.
If you're worried about filing for bankruptcy because of the possibility of losing your car, you should talk to one of our Seattle repossession lawyers and get the facts. Bankruptcy is designed to get you back on your feet financially, which is like hitting a reset button on your bills. If keeping your car is important to you, our King County bankruptcy lawyers will fight to make this end result possible.Make sure you know your legal rights with help from our Washington State bankruptcy attorneys
- If your car is paid for in full, it is likely covered by exemptions that protect its seizure by creditors
- If you're making car payments, you can keep the vehicle if you choose to continue making payments
- Redemption is a process that allows you to pay off a car loan with a new loan from a different vendor
- Chapter 13 bankruptcies allow you to spread out car payments over five years as part of your debt consolidation
If you're worried about losing your car to repossession or as a result of filing for bankruptcy, you need to understand how the law applies to your situation. Bankruptcy law protects cars valued at up to $3,500 from creditors with the "automobile exemption." There is also a federal wildcard exemption of up to $11,975,and one from the state for $3,000. These exemptions apply to cars that are paid for in full, and married couples can "stack" the exemptions.
If you're still making payments on your vehicle, you can keep up with your payments and keep the car, but in situations involving Chapter 7 bankruptcy you may have to reaffirm the loan. This essentially means the car loan is no longer part of the bankruptcy, so you want to be fully aware of the risks before making this choice.Your King County bankruptcy attorney can help you prevent car repossession
Bankruptcy laws in Washington State also allow you to pay off a loan in the amount of the car's value. This process is called redemption, and it requires that a motion be filed in court. Obviously, there could be some dispute regarding the actual value of the car, which may require negotiations.
If you file for Chapter 13 bankruptcy in Seattle, you can pay off the car loan with monthly payments over the term of the debt consolidation, which is usually five years. If 30 months have passed since you purchased the car, you can "cram down" the loan, which means you pay a portion of the loan covered by the car's full value, plus any interest. This can save you a lot of money in the long run.Get answers to your car-related questions by contacting a Seattle bankruptcy attorney for a free consultation
You likely can't live without your car. Contact our law office in Washington today and find out more details about maintaining ownership of your vehicle after filing for divorce. You have options that a Seattle car repossession attorney can explain, and legal rights that we will protect.