If you finance or lease a car, and you file chapter 7 bankruptcy, you will need to decide whether to keep it or voluntarily surrender it and discharge the debt. Depending on your exact situation, this may not be an easy decision. Knowing the benefits and consequences can help make your decision easier.
Benefits of Voluntarily Surrendering Your Car
Voluntarily surrendering your car can have many benefits. These include:
- Being completely free of the debt
- Having extra money to use for other bills
- It will not go on your credit report as a repossession
For many people, surrendering the vehicle can be a huge relief. This is especially true if you were behind on the payments or had to choose between making the monthly payments or paying another bill. Also, by surrendering it, you will have an easier time obtaining a post-bankruptcy auto loan than if it had been repossessed outside of bankruptcy.
Consequences of Turning Over Your Vehicle
Turning over your vehicle to the lender can also have several consequences. These include:
- Having to find another means of transportation
- Any cosigners on the loan are still responsible for the debt
- Future loans may be at a high interest rate
These consequences can often be a source of stress. If you live in an area without good public transportation, or you have a cosigner on the vehicle, you may want to consider keeping it instead. Although you will still be responsible for the payments, this may be the better option.
Car Financing after Bankruptcy
If you decided to turn the vehicle over to the lender, you may wonder how to get car financing after bankruptcy discharge. Here at BankruptcyAutoFinancing.com we have helped thousands of people like you get the financing they need. To get started, simply fill out or simple online application, and you could be driving a new-to-you car, truck or SUV the same day.
Remember we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.