Bankruptcy and Your Cars

If I file for bankruptcy, will I be able to keep my car?

As an Olympia resident, you probably need your car to get around. If you file for bankruptcy, will you be able to keep your car? This is a good question, because without a car you may not be able to get to work or run necessary errands.

The Federal and Washington State bankruptcy laws regarding exemptions were created to help people get a fresh start financially by eliminating debt. For many, losing their primary means of transportation would significantly hinder that effort, so the law offers protections for people who file for bankruptcy.

To find out whether you’ll be able to keep your car, it’s necessary to speak with one of our Olympia bankruptcy lawyers about your financial situation. However, the good news is that most people who file for bankruptcy are able to keep their vehicle, so let’s look further into the law to better understand how it works.

Our Thurston County debt relief lawyers not only serve Olympia, but all surrounding cities as well. These include but are not limited to the residents of Lacey, Tumwater, Yelm, Rainier, and Rochester.

Bankruptcy laws were written to help you, not hurt you.

If your car is paid for, then it’s protected from seizure during bankruptcy so long as its value is not over the exemption limits allowable for vehicles. If you’re making monthly payments on your car, simply remain current and you can probably keep your car. Though, more and more lenders are also demanding a reaffirmation agreement now.

If you file Chapter 13 bankruptcy, you can include the amount that you owe on your car as part of your debt consolidation, which allows you to pay it off in 3 to 5 years. It may even be possible to pay off your current auto loan with a loan from another lender. This is called redemption, but it’s not a suitable option for everyone.

Obviously, there are many factors that need to be considered. For example, if your car is valued at less than is allowed under the exemption limit, it is 100% protected from seizure by something often referred to the “Washington State automobile exemption”. If it’s worth more than amount allowed under the Washington State automobile exemption, other exemptions could be applied to the car that allows you to maintain ownership.

For example, one potential exemption that could help here if you are filing under Washington bankruptcy laws is the “Washington State Wildcard Exemption.”

Or, if you are filing under the federal bankruptcy laws, you may be able to use the “Federal Wildcard Exemption” to make up for any excess equity.

As you can see, this issue gets complicated quickly, which is part of why it’s important to speak with experienced Thurston County bankruptcy lawyers about your legal rights and options when it comes to keeping your car or vehicle after filing for bankruptcy protection and relief.

If you’re filing Chapter 7 bankruptcy and owe money on your automobile, you can maintain monthly payments and keep your car. However, the lender may require that you reaffirm the loan. This excludes the automobile from bankruptcy proceedings, so it’s something you should discuss with your Thurston County bankruptcy lawyer to ensure it’s in your best financial interests.

Olympia, Washington, owning a car, and filing for bankruptcy.

Olympia is not only the capital of Washington, it’s a great place to live with endless opportunities to succeed financially by starting a business or working for an employer. If you would like to know more about this picturesque city, take a look at the City of Olympia website, which is full of useful information about local politics and business. You can also learn a ton about Thurston County by visiting the Thurston County, WA website.

Olympia is close to one of our nation’s most beautiful national parks, but also nearby one of its greatest cities. Best of all, Olympia maintains a small-town atmosphere that many people find irresistible. Sadly, financial difficulties routinely affect residents who experience a prolonged illness or get laid off from work. Debt can quickly spiral out of control in these scenarios, and it’s why around 1,000,000 people declare bankruptcy every year in America.

If you’re a Thurston County resident and you file for bankruptcy, you will petition the U.S. Bankruptcy Court of Western Washington in Tacoma. These pages contain a ton of useful and helpful information about filing for bankruptcy as a Thurston County resident. Then when you’re ready to dive into the finer details, contact one of our Olympia bankruptcy attorneys and find out whether you can keep your car after filing.

Our lawyers know multiple ways to help you maintain car ownership.

Redemption is another bankruptcy process that allows you to maintain vehicle ownership. First, your Olympia bankruptcy attorney will make a motion in court asking to pursue this option. There may be some dispute about the real value of the car, but we will be prepared to explain our side of the story. If it’s approved, you can pay off the remainder of your car even after declaring bankruptcy.

If you file Chapter 13 bankruptcy, you can add the amount you owe to your debt consolidation plan. You will be required to maintain payments for 3 to 5 years. “Cramming down” the loan allows you to pay off only the portion representing the vehicles actual value, plus interest. However, this is only possible if you’ve owned the automobile for at least 30 months. This can save you a lot of money in the long run, and it’s just one more way our Olympia bankruptcy lawyers fight to minimize your debt.

Contact our Olympia bankruptcy lawyers today for a FREE consultation.

If you need your car and are worried that filing for bankruptcy will cause you to lose it, contact one of our Olympia bankruptcy lawyers today and get the facts.

(360) 350-4830