Car repossessions and bankruptcy

If your car is repossessed you will likely owe the finance company or bank for the costs connected with repossessing your car. More so, you may owe for the difference between what you owed on the vehicle and the amount for which the car was sold at auction. This gap is referred to as a deficiency.

Both the repossession costs and any potential deficiency are dischargeable through a bankruptcy filing.

If your car is repossessed, bankruptcy can also get your car back. Timing and type of bankruptcy are factors in whether your car can be reclaimed if you file for bankruptcy.

Is there a minimum amount of debt to file bankruptcy?

No. Bankruptcy can eliminate any amount of debt. Whether it is worthwhile to file bankruptcy with the amount of debt you owe is the question. The analysis to determine wether to file bankruptcy should be which of the following options will better you:

1. To have a bankruptcy and no debt; or

2. To have debt and no bankruptcy.

The answer sometimes is not simple. Typically when people lose the ability to afford their debt, bankruptcy and the discharge of their debt is the best bet. Though bankruptcy is a negative on your credit, it is almost always a better option then carrying debt that cannot be paid. By eliminating your debt, your debt-to-income ratio is instantly improved which, understandably, instantly improves your credit.

Part of the equation, too, must be the mental aspect of debt. clearing your debt can offer peace of mind and the prospect of not living under debt. Never underestimate what debt–or its absence–can do to your well-being!

Bankruptcy and credit card debt

Credit card debt is one of the most common types of debt discharged in bankruptcy. It is normally unsecured debt, meaning the debt does not need to repaid after filing for bankruptcy.

Transferring property prior to filing bankruptcy

Before filing bankruptcy do not transfer your property to anyone. Doing so may subject the property to a claim of the trustee. This means that even if you give your property away, the trustee can potentially take the property back and use it to pay your creditors.

Exemptions laws, particularly in California, generally allow you to protect all your property and, in so doing, there is no need to shield your property by giving it to someone else before you file for bankruptcy.

Bankruptcy payment plans

Most clients in Sacramento who need to file bankruptcy cannot afford to pay it in one lump sum. That’s fine. My office has always accepted payments made over time to pay for a bankruptcy.

There are no minimum fees, deadlines, interest or other charges associated with payment plans. Pay as you can, when you can. The bankruptcy cannot be filed until the bankruptcy is paid in full, but you can take as long as you need to pay it off.