If you plan to purchase a vehicle but don't have enough money, you can decide to acquire a loan to make this possible. But unfortunately, your automobile's value might decrease quickly, and your loan might be worth more than your car's worth. Luckily, you can be able to lower your car loan by applying for Chapter 13 bankruptcy. But, this privilege is not always available to every applicant, so you must understand the procedure to follow to increase your chance of qualifying. Enlisting the help of a bankruptcy lawyer is crucial in that regard. They will guide you in the following essential aspects.
Qualification and Application
Usually, you can only qualify for a deduction on your car loan if your car's value is less than its loan. Also, keep in mind that some states only consider applicants who own personal vehicles. That means you might not be able to get a lower deduction on your vehicle loan if you own a business automobile.
You can separate your car loan into two parts if you meet all the application requirements. One portion will cover a debt equivalent to your vehicle's value. Then, the court will incorporate the remaining amount into other unsecured debts like credit card debts. That will wipe out some of your car loans because you will only pay a portion of your unsecured loan.
When to Render Your Application
Timing is essential when you want to adjust your vehicle loan through bankruptcy. However, you might only enjoy this privilege if you have been paying your loan for the specified time. Therefore, you may not get a deduction if you acquired your loan previously. A bankruptcy lawyer will help you evaluate the situation to determine whether you qualify for a deduction on your car loan. They will also discuss the possible outcomes of declaring bankruptcy before applying for a vehicle loan reduction.
The good news is that you won't lose your vehicle due to bankruptcy even if you don't get a cramdown. Your legal advisor will guide you when applying for bankruptcy to avoid losing your vehicle even after a successful application.
Have you been struggling to pay your car loan and are afraid that your creditor might acquire it to recover their debt? Then, consult a firm such as Ozment Law PA to help you retain the vehicle through chapter 13 bankruptcy. They will guide you through the process to ensure you get the deduction and keep your vehicle.