Ohio who are struggling with debt are often trying to find different ways of managing their finances. In some cases, credit counseling or consolidation may be options, but these alternatives are not always feasible. In such cases, bankruptcy may be the most practical solution.
Unfortunately, many people have misconceptions about bankruptcy. One of which is that they will have to give up most or all of their property, including their vehicle. However, it is quite possible to keep a car in a Chapter 7 bankruptcy, although it depends upon the circumstances.
In the case of a Chapter 13 bankruptcy, there are several factors that could be considered when it comes to vehicle ownership. Chapter 13 is a form of bankruptcy in which debtors are required to repay creditors over a period of from three to five years pursuant to a court-approved plan.
Equity in the vehicle would be one consideration, as is the total worth of the vehicle. In a Chapter 13 plan, debtors are required to apply all available income to debt repayment, and can only keep that which is necessary to pay for regular living expenses. While car payments would generally be allowable under such a plan, an excessive payment for a very expensive vehicle may not be approved.
Individuals who are considering filing for bankruptcy and are concerned about being able to keep their car may benefit from speaking with an experienced bankruptcy attorney. There may be other forms of debt relief that are available and which do not require this type of analysis to be made. However, one advantage to bankruptcy is that filing puts at least a temporary stop to collection activities.