Can I Keep My Car?
If you file Chapter 7 and you own a vehicle outright, you can keep the car if it is worth $6,400 or less by using your Illinois motor vehicle and personal property exemptions.
Alternatively, if you have a note secured by your vehicle, you can keep the car by reaffirming the note, which means you agree to continue making the payments despite the bankruptcy.
You also can use “redemption” to keep your vehicle. Redemption requires you to pay the fair market value of the vehicle in full. This is a useful remedy if you are “upside down” on a vehicle. A handful of finance companies offer redemption loans that are repaid like an ordinary car loan.
Keeping A Car When Filing Chapter 13
In Chapter 13, you can keep your paid-for vehicles regardless of their value, as long as your payment plan delivers at least as much as your creditors would get if your unexempt assets were liquidated in a Chapter 7. If you owe money secured by vehicles, you can include the payments in your plan or pay outside the plan.
If you are behind in your payments, you can catch up your arrearage in your plan. And if your vehicle was purchased more than 2.5 years ago, you may be able to reduce the amount owed to the value of the vehicle, restructure the note over the term of your Chapter 13 plan and reduce the interest rate.
Contact An Experienced Illinois Bankruptcy Lawyer
Attorney Brian G. Hiatt can help you learn more about how filing bankruptcy can help you protect your possessions from being sold off to pay for your debts. Contact the firm in Bourbonnais by calling 815-304-5441 or by emailing the firm directly.
Brian G. Hiatt’s law firm is a debt relief agency. It helps people file for bankruptcy relief under the Bankruptcy Code.