A Connecticut Bankruptcy Attorney Can Help You Protect Your House and Your Car
If fear of losing your home or car is the preventing you from filing for bankruptcy, let a knowledgeable and professional Connecticut bankruptcy lawyer from our office assure you that we can help. The only reason you should worry is if you do nothing about your situation.
Whether you are considering filing for Chapter 7 or Chapter 13, the purpose of bankruptcy is to provide a fresh start by helping clear your unsecured debt (credit cards, medical bills, personal loans) and either settling or reorganizing your secured debt (mortgage or car loans). Bankruptcy does give you several choices with regard to your car and your house.
What Will Happen to My Car?
In a Chapter 7 case, you can keep your car if:
- You are current on payments for the automobile
- You prove that you can afford it
- The payment is within reason
When you file a Chapter 7 bankruptcy, you may be able to sign a reaffirmation agreement in which you agree to be responsible for the automobile loan as though you had not filed for bankruptcy. In many cases a reaffirmed car loan can result in a lower monthly payment.
A Chapter 13 case allows you to propose a plan to repay your creditors, but offers three options for how to retain your vehicle:
- If you are current on payments, you can continue to make payments directly to the lender outside of your plan.
- If you bought the car within 910 days prior to the date you filed for bankruptcy, you can pay the full balance due on the loan through your plan with a modified interest rate.
- If you bought the vehicle more than 910 days prior to filing for bankruptcy and you are still paying on the original purchase loan, you can propose a “cramdown,” in which you pay only the fair market value of the automobile as a secured debt with interest.
What About My House?
If you have a home with equity, you can protect that equity with exemptions. Connecticut law allows you to protect up to $75,000 of your home’s value. If a husband and wife jointly own the home and jointly file bankruptcy, then the exemptions doubles. If your equity exceeds that amount, you can keep your house if you file a Chapter 13 and pay the value through the plan.
If you owe money on your home, you can still keep the property in a Chapter 7 if you can afford the payment and if you are current on your mortgage. If you are behind on your mortgage, you can work with your lender or use a Chapter 13 bankruptcy filing to catch up on the mortgage over time.
In either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, you can choose to surrender your car and your house if you no longer wish to pay for them or if you can no longer afford them.
The Law Office of William E. Carter can determine which type of bankruptcy is best for your specific situation with a thorough review of your financial portfolio. To ensure the protection of your assets, you must speak to a reputable Connecticut bankruptcy attorney so you do not commit a costly and preventable mistake.
If you find yourself worrying about how you will be able to keep your house or car while addressing your mounting debt, contact our office today for a free, personal consultation that could provide with all the necessary bankruptcy information and the lifeline you need.