A lot of people thinking about filing for bankruptcy wonder if they should transfer their car out of their name before filing. This is because of all the misconceptions associated with bankruptcy that have people fearing the worst. The one we hear the most is that your vehicle will be taken by your trustee no matter what, and you will not be able to get another car loan after bankruptcy for ten years.
The fact is these misconceptions are not true. There are different circumstances for each bankruptcy case in which your car could or could not be liquidated. The bottom line is you should not transfer any property without talking to your Michigan bankruptcy lawyer first.
Don’t Transfer your Car before Filing a Michigan Bankruptcy
The fear of losing your home or car in your bankruptcy is an understandable fear, but transferring property to avoid creditors is considered at fraudulent conveyance. In Michigan, the law states that trustees can look as far as six years into your past and “undo” any fraudulent transfer. It is much safer to talk to your lawyers, and proceed from there.
If you file a chapter 13 bankruptcy then any fear of losing your car to the bk trustee is out the door because it is a repayment plan, not liquidation. A chapter 7 plan, however, is a liquidation plan meaning the possibility of the trustee taking your car is there, but it is not positive. If you happen to have more than $3,250 in equity in your car, you car may be liquidated, but we can help you obtain a new auto loan during bankruptcy should that happen.
Bankruptcy Auto Financing in Michigan
Getting vehicle financing with a bankruptcy on your credit report is very possible, and believe it or not, readily available to those who know where to look. Many Michigan lenders have lowered their requirements for auto loans, and there made it a possibility for people suffering from bad credit to obtain one.
Sounds too good to be true, right? Well, here at BankruptcyAutoFinancing.com we specialize in setting bankrupt Michigan residents with a Michigan dealership accepting bankruptcy. By applying with us online you are allowing yourself the best chance at an approval, and you could be into a new vehicle before you know it.
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.