Cars and Bankruptcy in Everett

Your vehicle is one of your most important possessions. In Everett, you usually need a car to commute to work or get your kids to and from school. The law recognizes the necessity of personal vehicles, which is why they are protected up to a certain amount when filing for bankruptcy in Washington.

If you're worried about the possibility of losing your car because of filing for bankruptcy, you should talk to one of our Everett repossession attorneys and get the facts. Bankruptcy was created to get you back on your feet financially, which can be difficult if not impossible after losing your only means of transportation. If retaining ownership of your vehicle is important to you, our Snohomish County bankruptcy attorneys will fight to help you keep your car.

• If your car is paid for, part or all of its value is covered by exemptions that protect it from repossession
• If you're still making monthly car payments, you can keep your vehicle if you continue making payments
• You may also pay off a car loan with a new loan from a different creditor, which is called redemption
• Chapter 13 bankruptcy allows you to spread out your car payments over a three to five year period as part of your overall debt consolidation

If you're worried about your car being repossessed because you file for bankruptcy, you need to understand how the law protects your interests. Bankruptcy laws protect vehicles valued at up to $3,500 from creditors which is referred to as the "automobile exemption." There is also a wildcard exemption of up to $11,975 that can be applied to cars provided by the federal government, and another from the state for $3,000. These exemptions only apply to cars that are paid for in full. Married couples are allowed to "stack" multiple exemptions.

If you're still making monthly payments on your vehicle, you still have options. You can maintain current payments and keep the car, but in Chapter 7 bankruptcy situations you may have to reaffirm the loan. Reaffirming your car loan removes it from the bankruptcy, so you need to weigh your entire financial situation before making this choice.

Bankruptcy laws allow you to pay off a loan in the total amount of the car's value. This process is referred to as redemption, and it requires a court motion. There could be some dispute between disputing parties regarding the actual value of a vehicle, which may require some negotiating.

If you file for Chapter 13 bankruptcy in Everett, you can spread out the debt of your car loan over the term of your debt consolidation, which is usually five years. If 30 months have already passed since you purchased your vehicle, you can "cram down" the loan. This means you pay a portion of the loan covered by the car's full value, and any additional interest, which can ultimately save you a lot of money.

If you're like most people living in Everett, you can't live without your car. Contact our Washington State law office today and find out how you can maintain ownership of your vehicle after filing for bankruptcy. Your Everett car repossession attorney can explain your options in detail, and will always defend your legal rights.