Saturday, October 31, 2009

What happens to your car loan if you declare bankruptcy?

My wife and I have had a really rough streak and have all of our credit cards go into collections. There is really no way I can pay all of this back. We are considering bankruptcy and wan't to include our car in it. We can no longer afford the car payments and the value is far less than our payoff amount (10K less). If I declare bankruptcy, will they repo the car and if so, will I still owe anything or is it written off?



What happens to your car loan if you declare bankruptcy?

If you qualify for chapter 7 and the debt on your vehicle is included and the bankruptcy is discharged, then you will owe nothing on the vehicle but the lender will pick it up.



I have posted a link where you can go and look up all kinds of information on bankruptcy's, you can even take a test to see what chapter you qualify for.



If you do this, don't think it's the end of the world, I went through it back in 2001 and my credit now is better then it was before the bankruptcy, all scores over 750 and can get approved for anything I want at the best rates.



http://www.bcsalliance.com/index.html



What happens to your car loan if you declare bankruptcy?

If you include the car in the bankruptcy it will be written off, and you will not owe anything. A bankruptcy takes ten years to clear from your credit report, and will affect your credit score really bad. Maybe you should try a debt consolidation first.



What happens to your car loan if you declare bankruptcy?

If you surrender the car, you can either voluntarily turn it over or they can repo it. Your debt will be discharged if there is a deficiency.

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