Welcome to Bankruptcy Guide
Bankruptcy Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
from: How to Figure Out the Value of Your Bankruptcy Car Loan
Most people have a car loan when they file bankruptcy, so the old and new bankruptcy laws address loans on vehicles. Unfortunately, the new laws are tougher on debtors in terms of how much you must repay on your outstanding loan. This forces the debtor to pay the full amount for loans that even have excessive interest rates.
Under the old bankruptcy laws, debtors only had to repay the value of the vehicle they owned. That meant you only had to pay back the current resale value and not the retail value of the vehicle. Under the new law, if you have had a loan placed on the car within the last 3 years, you will have to pay the full amount of the loan.
This is one of the most significant changes in the new bankruptcy law.
Under the old law, the courts would have determined the real value of the car and then figured up what you had paid to date and what you would owe in payments to reimburse to that value.
Under the new law, you have to pay the full amount or lose the car.
This means that if you took out a loan at a high interest rate, you will still have to pay back the full loan. In effect, you are paying 2 or 3 times what the car is worth.
This law change made it most difficult on those who had to accept less than desirable car loans in order to obtain a vehicle. Of course, under a chapter 7, you can surrender the car if you simply cannot afford to make the payments. But once again, that makes it difficult to recover from a bankruptcy when you have no car to drive.
Under chapter 13, the car loan payment is included in your repayment plan.
Speaking of bankruptcy car loans, you will probably be inundated with car loan offers once your bankruptcy is discharged. You won’t ask for the information, but plenty will show up in your mailbox.
Auto dealers know many people surrender their cars and need a vehicle, and so they track bankruptcy court records to find out who has filed. The letters claim to want to help you rebuild your credit, but you must be very careful. Odds are the car loan will be charged a premium interest rate because of your credit rating.
The good news is that if you can afford to buy a car, and don’t have one, the bankruptcy will not stop you from finding interested lenders.
It is important to remember though that you don’t want to start creating new debt that you cannot afford to pay. You cannot file another chapter 7 for 8 years or a chapter 13 for 4 years. New creditors see themselves as first in line again in terms of collection status.
Related Articles for Bankruptcy
Bankruptcy News
FairPoint bankruptcy finally filed - The Union Leader
![]() Boston Globe | FairPoint bankruptcy finally filed The Union Leader CONCORD – FairPoint Communications' bankruptcy reorganization plan, filed yesterday after weeks of delays, would wipe out $1.8 billion in ... FairPoint Files Bankruptcy Reorganization Plan FairPoint files bankruptcy plan FairPoint files bankruptcy plan |
New filing in Fair case Bankruptcy now on court list - Wooster Daily Record
New filing in Fair case Bankruptcy now on court list Wooster Daily Record WOOSTER -- Fair Finance investors moved the Akron-based company into US Bankruptcy Court Monday, a move aimed at reducing the dissipation ... Fair Finance Faces Involuntary Bankruptcy in Ohio Fair targeted for bankruptcy Fair Finance Faces Involuntary Bankruptcy |
Drastic Steps Needed to Prevent Bankruptcy - City Watch
Drastic Steps Needed to Prevent Bankruptcy City Watch This is the most serious situation we have faced in 75 years and without drastic steps, the City is threatened with bankruptcy. We cannot allow that to ... Bankruptcy ahead? |
Video chain bankruptcy closes stores in Boise, Emmett - IdahoStatesman.com
Video chain bankruptcy closes stores in Boise, Emmett IdahoStatesman.com PETERSBURG TIMES The nation's second-largest video store chain has retreated back into bankruptcy proceedings with a plan to close 805 more stores. ... Movie Gallery to shut five NH stores BRIEF: Movie Gallery expected to close its last Bloomington store |
Who will save Ukraine from bankruptcy? - Daily Nation
Who will save Ukraine from bankruptcy? Daily Nation Elections were held in Ukraine yesterday with Mr Viktor Yanukovich emerging winner ahead of Prime Minister Yulia Tymoshenko. However, amid the talk about ... |
CIT Taps Former Merrill Chief Thain as New CEO - Money Morning
![]() Washington Post | CIT Taps Former Merrill Chief Thain as New CEO Money Morning Peek was ousted after he crippled the company with ill-fated forays into subprime lending and student loans, which led to a federal bailout and bankruptcy ... Protecting Banks in the Boardroom John Thain: Mr. Fixit Tries Again Icahn Supports Thain As New Chief Executive Of CIT Group >CIT |
Vectrix in 'stronger hands' after bankruptcy - South Coast Today
Vectrix in 'stronger hands' after bankruptcy South Coast Today NEW BEDFORD — Vectrix Corp., an electric scooter company, has been relaunched under new ownership after entering Chapter 11 bankruptcy ... |




