REAFFIRMING YOUR AUTO LOAN
In our last post, “Auto Loans in Chapter 7 Bankruptcy Pt. II,” we talked about funding your vehicle redemption.
In this post, we will discuss a few options other than redemption that are available to debtors when filing a Chapter 7 bankruptcy with respect to car loans.
Reaffirming Your Car Loan
We discussed the redemption option in detail because if it is a viable option in your situation, it can save you a lot of money. However, if you still want to keep your vehicle but redemption is not an option, then you would look into reaffirming the loan that you already have on your vehicle.
By doing this you are simply signing an agreement to continue paying on the vehicle. You would still be bound by this agreement as if you had never filed bankruptcy on this debt once the bankruptcy is over.
What If I Can’t Make The Payments Once I Reaffirm?
If you sign this agreement and do not continue making the payments, your vehicle can be repossessed and if it is sold for less than what you owe on it then you can be sued for the difference.
These vehicles are sold at auctions usually to auto dealers who buy vehicles in bulk. This is just one reason why it is more than likely that a repossessed vehicle will be sold for less than what the debtor owed on the vehicle.
Make A Well-Informed Decision
Our firm will pursue the best option for you when reaffirming your vehicles and do our best to try to ensure that the payment will not create a financial hardship.
Scheduled your free initial consultation today to learn whether or not bankruptcy can help solve your financial problems.