Will I Lose my Car if I file a Utah Chapter 7 Bankruptcy? In short the simple answer is “it depends.” When you file a West Jordan Chapter 7 Bankruptcy, an automatic stay goes into place which halts further collection efforts by creditors like a repossession or lawsuit. In a West Jordan Chapter 7 Bankruptcy the basic rule of thumb is that if you keep the car, then you keep the same terms and payments with the lender. Your options are to reaffirm, redeem, or surrender the debt.
- Reaffirmation: If you can negotiate an agreement with your creditor, you can essentially reaffirm the terms of the original debt. In simple terms it means that both you and the creditor ignore the fact that your bankruptcy took place, and you continue to make car payments as if nothing happened. Occasionally the creditor will negotiate more favorable loan terms.
- Redemption: This option is rarely used, but you may be able to reach an agreement with the creditor where you make a lump-sum payment that is equal to the value of the car rather than the remaining balance owed.
- Surrender: You can return the car back to the creditor within thirty days of your Meeting of Creditors. You will be relieved of the debt associated with the property and any deficiency if any.
If your goal is to change your interest rate or modify the loan terms then you should explore filing a West Jordan Chapter 13 Bankruptcy.
Please call me at (801) 432-8682 to discuss your options and whether a West Jordan Chapter 7 Bankruptcy or a West Jordan Chapter 13 Bankruptcy is the best option for you.