This is an advertisement

This Is Where People Come To Start Healing

How bankruptcy impacts vehicle ownership

An individual going through bankruptcy in Kentucky doesn't necessarily have to give up their vehicle during the proceedings. This may be true even if the lender was otherwise inclined to repossess the car. When a person files for bankruptcy, they receive an automatic stay of repossession or other creditor collection actions. Generally speaking, if the debtor agrees to make payments during the three or five year repayment plan, they can remain in possession of the car.

In some cases, it's possible to buy a vehicle during an open Chapter 13 case. Doing so requires approval from the bankruptcy trustee as well as a bankruptcy judge. A lender will include relevant loan information such as the monthly payment, interest rate and down payment on a sample statement.

When describing the type of vehicle the debtor wants to purchase, the sample buyer's order should include the words "or similar."This will make it easier to acquire a vehicle if the specific model is no longer available after the purchase has been approved. After a bankruptcy case has concluded, individuals are free to buy whatever they can afford. In most cases, borrowers will work with subprime lenders who may ask for down payments of up to 10 percent of the purchase price.

Filing for Chapter 13 bankruptcy may offer many benefits to those who are struggling to keep up with their debt. In addition to an automatic stay of collection activity, a debtor can ask for a cramdown. This reduces the secured portion of an auto loan to the actual value of the car. Any remaining balance is converted to unsecured debt. An attorney may explain these or other benefits to a debtor.

No Comments

Leave a comment
Comment Information
Email Us For A Response

We’re Ready To Answer Your Questions

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Main Office
909 Main Street
Shelbyville, KY 40065

Phone: 502-257-5417
Fax: 502-633-6762
Shelbyville Law Office Map

McClure Building
306 East Main Street
Suite 605
Frankfort, KY 40601

Phone: 502-220-4439
Frankfort Law Office Map