Denver Bankruptcy: Can I Keep My Car?
In most cases, you can keep your vehicle after filing for bankruptcy in Colorado.
The Denver bankruptcy attorneys at George T. Carlson & Associates will review your personal financial situation and help you decide upon the best course of action. While you may be able to keep your vehicle, the question you should more often ask yourself is whether it is in your own financial best interest to do so. Those who use the bankruptcy laws to their best advantage typically come out the other side with a new lease on life and a new understanding of best practices when it comes to managing their personal finances.
Colorado bankruptcy: Keeping a leased or owned vehicle
- Bankruptcy laws permit a $5,000 vehicle exemption ($10,000 is you are 60 years old or disabled). If your car has less than $5,000 in equity – and most do – you can generally keep the vehicle, so long as you continue making timely payments and maintain required insurance. However, the lender will have the right to repossess the vehicle unless you either reaffirm the debt or redeem the vehicle.
- Leased vehicles generally may be kept in bankruptcy, so long as you continue making timely payments and maintain required insurance. However, the lender will have the right to repossess the vehicle unless you assume the lease, which would be a new agreement to pay the lease.
Denver Bankruptcy and my car: Chapter 7 or Chapter 13
How you file for bankruptcy can also impact your choices.
- Chapter 7: In Chapter 7, a car lender will have the right to repossess your vehicle unless you either reaffirm the debt or redeem the vehicle. Generally, lenders who are receiving regular payments do not repossess. If the value of the vehicle is substantially less than the balance of the loan, redemption can be an opportunity to pay off the loan by merely paying the car’s value.
- Chapter 13: In chapter 13, if the value of the vehicle is substantially less than the balance of the loan, payments through the plan can be based on the car’s value.
- Congress made it tricky to deal with cars in bankruptcy. It is important that you discuss your options with an experience bankruptcy attorney.
Contact a Colorado Bankruptcy Attorney Today
If you need bankruptcy assistance in Denver or would like more information, call George T. Carlson & Associates today at 303-789-1313 for a free consultation or contact us online. We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code
Denver Bankruptcy Help – 303-789-1313 – Free Consultation
