Cars and Bankruptcy in Tacoma
If you live in Tacoma, you undoubtedly rely on your car every day. In fact, you probably use your car to get to work, get your kids to and from school, and do the things you need to do to live your life. Bankruptcy laws recognize the importance of personal vehicles, so exemptions exist that protect them from seizure in most cases.
If you have doubts about filing for bankruptcy because you could lose your car, talk to one of our Tacoma car repossession attorneys and get the facts. Bankruptcy is designed to get you back on your feet financially with a fresh start, and the law recognizes that people need their car to maintain this new opportunity. If keeping your car is a priority, talk to one of our Pierce County bankruptcy lawyers about your options and find out if you qualify to file.Understand your legal rights with help from our Washington bankruptcy lawyers
- If your car is paid for, bankruptcy exemptions exist that protect it from seizure
- If you're still paying on a car loan, you can maintain ownership of your car if you continue making payments
- Redemption is a process that allows you to keep your car that is acting as collateral on a secured debt by paying the creditor the value of the car
- Chapter 13 bankruptcies consolidate your debt in a payment plan, which also makes it possible to keep a car
When you file for bankruptcy, federal and state exemptions exist that can be used to protect your car from seizure. The "automobile exemption" protects $3,500 of a car's value from creditors. Additionally, there is also a federal wildcard exemption of up to $11,975,and another from the state of Washington for $3,000. These exemptions can be used if your car is paid for, and married couples can "stack" the exemptions for even greater relief.
If you're still making payments to your automobile lender, you can keep your car is you maintain payments, but this may be difficult if you're really struggling to pay bills. In some situations you may have to reaffirm the loan, which means that your car loan is withdrawn from the bankruptcy. Weigh this option carefully, because you want to be in the best financial position possible when your debt is ultimately discharged.Your Pierce County bankruptcy lawyer can help you prevent car repossession
Bankruptcy laws allow you to pay off a secured loan in the amount of the car's value when it's used as collateral. This process is referred to as redemption, and it requires a court motion. The company that secured the loan may dispute the value of the car, which may require negotiations to resolve.
In Chapter 13 bankruptcy situations, your car debt can be included as part of your debt consolidation, to be paid off over a period of three to five years. If 30 months have passed since you purchased your vehicle, you can "cram down" the loan. This means you are only required to pay a portion of the loan covered by the car's full value, plus any interest, which is a way you can save a lot of money in the long run.Contacting a Tacoma bankruptcy attorney for a free consultation and find out if you can save your car
Contact our law office in Washington today and find out whether you can maintain ownership of your vehicle after filing for bankruptcy. Your Tacoma car repossession attorney can explain your options, and your consultation is free.