While Florida bankruptcy filings totaled fewer than 80,000 for the first quarter of 2013 many filers are still faced with the decision of what to do with their auto loans. We know there are ways to keep your car by reaffirming your car loan, surrendering the vehicle, and auto redemption, so what’s the most beneficial?
All three hold different benefits, but for someone that wants to keep their vehicle with no monthly payment auto redemption is the best choice. An auto redemption is when you a lump sum to your lender for the fair market value of the car, instead of the balance of the loan.
For example, if you have a car that is worth $7,000 but you owe $10,000 you can pay your finance company a $7,000 lump sum and own your car free and clear. The extra $3,000 is then wiped out.
Pros and Cons of Redeeming your Vehicle Loan
There are some major benefits to redeeming your car loan in bankruptcy which are saving a large amount of money on the interest and principle balance of the loan and having transportation with no car payment. This is allows you to free up some cash for any other credit lines you may have open.
The biggest disadvantage of redeeming your loan is that the payment must be made in a lump sum. If you are going through bankruptcy this is most likely going to be problem, unless you get a redemption loan from another lender.
Redemption Loan Lenders
You can apply for redemption loans through any subprime lender in the Florida area that is not already your current lender. Finding a lender to grant you a loan while in bankruptcy may be more difficult than if you getting a new car loan after bankruptcy, but applying online can help you increase your chances of finding a lender.
Here at BankruptcyAutoFinancing.com we have a network of Florida lenders that are willing to help people in bankruptcy find auto loans at affordable rates. To see what you could be approved for fill out our easy secure auto loan application.
Remember, we are not lawyers and cannot give legal advice. The situations we discuss are our experiences over the years and may vary with each customer.