Cars and Bankruptcy in Olympia

Most people living in Olympia consider their car to be an everyday necessity. If you own a vehicle, you likely use it for getting to work, pick up kids from school, or perform errands throughout the day. Without your car, would you be able to do the things you need to do to get by?

If problems with debt are making it difficult or impossible for you to keep up with your bills, you may even be at risk of losing your car to repossession. The good news is that bankruptcy may offer you a way to keep your car, eliminate debt, and get back on your feet financially. Bankruptcy laws acknowledge the importance of personal vehicles, so exemptions for vehicles exist that protect automobiles from seizure up to a certain amount. In some situations, debt can be consolidated into a payment plan.

If fear of losing your car is keeping you from considering bankruptcy as a means of improving your financial situation, talk to one of our Olympia car repossession attorneys and get the facts. Bankruptcy was designed to help you eliminate debt while maintaining your dignity and ability to earn a living. If keeping your car is vital to achieving these goals, our Thurston County bankruptcy attorneys will help you determine whether you qualify.

• If you own your car, our Olympia attorneys will review all bankruptcy exemptions that protect it from seizure
• If you're still paying on your car loan, you can maintain ownership if you continue making your payments
• Redemption is a process that allows you to maintain ownership of a car that is acting as collateral on a secured debt
• Chapter 13 bankruptcy consolidates all debt in a payment plan, which is a viable way to maintain ownership of your car

Federal and state exemptions that protect vehicles are included in bankruptcy laws. The "automobile exemption" is a federal exemption that protects $3,500 of a car's value. Two "wildcard" exemptions also protect cars; one from the federal government totaling $11,975,and another from the state of Washington totaling $3,000. These exemptions are available to people who own their cars, and married couples can "stack" exemptions for even greater relief.

If you still have a loan on your automobile, you can maintain possession of the vehicle if you keep making payments, but this may not be possible if you're having serious money problems. Your lender might allow you to "reaffirm" the loan, which basically means you withdraw it from the bankruptcy. This may be a viable option, but it should be carefully considered. The point of filing for bankruptcy is to discharge debt and set yourself up for success when the process is complete, so continuing to pay on a car loan may be a detriment to this goal.

If your car was used as collateral for a loan, you can pay back the lender the current value of the vehicle and maintain possession of it. This process is called redemption, and requires a motion in bankruptcy court. If the value of your car is less than the amount secured on the loan, the value of the car may be disputed by the lender. Resolving these kinds of issues often requires negotiations.

In situations involving Chapter 13 bankruptcy in Washington, the amount you owe on your car can be consolidated with the rest of your debt, and paid off in three to five years. You're can also "cram down" a loan if 30 months have passed since you bought your vehicle. Cramming down means you can pay back a portion of the loan covered by the car's full value, plus interest, which is often a good way to save money.

Contact our law office in Olympia and find out if you can maintain ownership of your vehicle after filing for bankruptcy in Washington. Your consultation is free, so let one of our Olympia car repossession lawyers explain your options.