Frequent question: Are car loans dischargeable?

Most debts are dischargeable through bankruptcy. Common types of dischargeable debt include: Credit card debt. Car loans.

Are auto loans dischargeable?

If you’re still making payments on the car, you can choose to keep the car, or surrender it back to the car lender. If you surrender the car, your obligation to pay the car loan is discharged along with your unsecured debts.

Can you discharge a car loan in Chapter 7?

If you don’t want to keep your financed car in Chapter 7 bankruptcy, you can surrender it and discharge the car loan. If you have a car loan or a car lease when you file Chapter 7 bankruptcy, you must choose whether to keep the car and continue to pay for it or surrender it and discharge (wipe out) the debt.

Can a lender cancel a car loan?

Bank cancellations of car loans are extremely rare and often the result of an error or problem with a payment. Make every effort to resolve the problem by immediately contacting the bank.

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What happens if you don’t reaffirm your car loan?

If you don’t sign a reaffirmation agreement, the lender can repossess your car after your case closes and the automatic stay lifts. … Reaffirming your car loan will provide certainty against the lender repossessing your car as long as you keep current with your payments.

Is it better to surrender your car?

Voluntarily surrendering your vehicle may be slightly better than having it repossessed. Unfortunately, both are very negative and will have a serious impact on your credit scores.

What happens to my car loan after Chapter 7?

If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments. … To determine how much equity you have in the vehicle, subtract your current loan balance from the car’s value.

How long after Chapter 7 Can I get a car loan?

Though it’s possible to apply for a car loan after your Chapter 7 discharge, that could take awhile: cases generally last a total of about 3 to 5 months from the date of filing to the day your debt is discharged. And once you’ve cleared that hurdle, beware of high interest rates.

Can a bank cancel a car loan after approval?

Unfortunately, all too often you’ll likely find the dealer is not willing to take the vehicle back after the loan is approved. If that’s the case, contact the bank to determine the full amount you’ll need to pay off the loan in full. Then sell the car to get as close as possible to what you owe.

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What if a car dealer lied to you?

You might be tempted to contact the salesperson to address the issue. Don’t do that! If he or she lied to you once, they will likely lie again. Instead, contact a knowledgeable attorney that will assess your case for free and then, if your case is viable, represent you in your case for no out of pocket cost to you.

Can I return a car and get my down payment back?

You should be able to get your down payment back if you purchased a vehicle. … If you left a down payment but told the dealership you wanted it back upon purchasing the vehicle, your down payment will be returned if it was not applied toward the vehicle’s purchase price when you obtained financing.

Should I reaffirm my car loan after Chapter 7?

A reaffirmation agreement can be advantageous to you because: You will keep the vehicle; You may be able to negotiate more favorable terms for the loan; and. Paying the loan can help rebuild your credit rating after bankruptcy.

Can I keep my car without reaffirming?

Reaffirmation is voluntary

Surrender may be the best thing if the car is simply too expensive or isn’t reliable. You can choose to keep the car and continue paying without reaffirming. You take your chances that the lender will repossess the car, but you also keep the benefits of the bankruptcy discharge.

Can you negotiate a reaffirmation agreement?

By contrast, a reaffirmation agreement is a new contract. It’s often on the same terms as the prior contract, but you can try to negotiate a new payment amount, interest rate, or some other provision.

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