Can I File for Chapter 7 Bankruptcy in Arizona and Keep My Car?
Some people are hesitant to file for bankruptcy, even when they are mired in debt and are facing ongoing harassment from their creditors. They may start getting notices of repossession or even of foreclosure, yet they still don’t take action. There is a lot of stigma around bankruptcy, with many people thinking that it’s a moral failing or that it will destroy their credit. The reality is that bankruptcy is a legal right designed specifically for people like you who are struggling with debt, and filing for bankruptcy can actually save your credit from the damage that late payments, high balances, and delinquencies will inflict on it year after year.
Another reason that some people are hesitant to call a Gilbert bankruptcy lawyer and learn about their options is they are worried about losing their home or their car. But, in many cases, you can exempt these items from your bankruptcy filing or can take other steps to protect them. Here are a few things that might be possible:
If you file for Chapter 7 bankruptcy in Gilbert, you can gain maximum debt relief. Your unsecured debts can be completely discharged, which means that you will not have to pay them. There is no limit on how much debt can be discharged, only on the type of debt. Secured debts like auto loans and mortgages cannot be discharged.
You have to pass a meant test to qualify to file for Chapter 7 bankruptcy. That test looks at not only your income, but also your assets. Bankruptcy law allows you to keep an asset up to a certain value. So, if you are still paying on your vehicle and don’t have a lot of equity in it, or if you own your vehicle outright but it is older and not worth much, you will likely be able to keep your vehicle since its value will likely be within the exemption amount.
Restructuring the Debt
Perhaps you have already fallen behind on the payments for your vehicle and you are facing repossession. Bankruptcy cannot discharge what you owe. Since the debt is secured, your auto lender can repossess your vehicle to satisfy the debt, even if you have filed for Gilbert Chapter 7 bankruptcy and received a discharge.
However, if you file for Chapter 13 bankruptcy in Gilbert, you can restructure your debt and catch up on those missed payments, allowing you to keep the vehicle. Under Chapter 13, your debts are included in a structured payment plan. You make one monthly payment for all your debts that you can actually afford. At the end of the repayment plan, which can last three to five years, you may be able to discharge whatever debt is left. You would need to discuss the specifics of your case with a Gilbert bankruptcy attorney to know what’s possible.
Forsaking the Vehicle
You may decide that you don’t actually want to keep your vehicle. You may have fallen too far behind in your payments, and you may not want to (or be able to) pay to catch up the payments. Or maybe you want to discharge your debt, rather than restructure it. If you have more credit card debt than secured debt, you may just want to Chapter 7 bankruptcy.
Whatever the reason, you may just decide to let the car go. You may file Chapter 7 to deal with your other debt, and you may decide to let your lender repossess the vehicle.
You have a number of options to deal with your debt. Talk to a bankruptcy attorney serving Gilbert to find out the best strategy for using bankruptcy to get the maximum debt relief possible.
Call Gilbert Bankruptcy Lawyers to learn more about your options through bankruptcy. A Gilbert bankruptcy attorney from our team will sit down with you to review your finances and to better understand your goals through bankruptcy. The attorney will then recommend strategies for meeting those goals through bankruptcy and relieving you of as much debt as possible. We handle both Chapter 7 bankruptcy and Chapter 13 bankruptcy cases. Call us in Gilbert today to schedule a consultation with a trusted bankruptcy attorney and learn more.