Can title loans go on bankruptcies?
A title loan often survives bankruptcy, and you may have to make payment arrangements or surrender the vehicle to the creditor after the bankruptcy is discharged.
Can a title loan be included in Chapter 7?
Under Chapter 7, you have the option to “redeem” a secured debt. That’s the only way to keep your car through the bankruptcy. To redeem title loan debt, you’ll have to pay the market value of the car in one lump sum. For example, say your car is worth $4,000 but you owe $6,000 to the title lending company.
How does a Chapter 7 work?
Background. A chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in chapter 13. Instead, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay holders of claims (creditors) in accordance with the provisions of the Bankruptcy Code.
Can you keep a car loan if you file bankruptcy?
If you want to keep a financed car after filing for bankruptcy, you’ll have to pay for it. Many people are under the mistaken belief that filing for bankruptcy allows you to wipe out an auto loan while keeping the vehicle free and clear of any payments. It just isn’t true. Bankruptcy will unwind your obligation to pay back the loan.
Do you have to include title loan in bankruptcy?
It’s important that you list the title loan because you want it to be clear in your bankruptcy paperwork that your vehicle likely has no equity. You might not be able to protect much, if any, of the vehicle equity when filing bankruptcy.
Can you sell a car with a title loan?
In order to sell the vehicle or transfer it, you would need to get the pink slip back. To do that, you have to pay off the loan. It’s important that you list the title loan because you want it to be clear in your bankruptcy paperwork that your vehicle likely has no equity.
Can a title loan be paid off in Chapter 13?
You will then pay off the title loan through the Chapter 13 plan, and have the vehicle free and clear of that loan at the end of the case. This does not work for car loans that you took out to buy the vehicle, unless the loan is more than three years old.