If you are struggling each month to pay your bills and you see no relief in sight, bankruptcy may be the best option. Understandably, you may be concerned about how bankruptcy will impact your life and your future. For example, you may be concerned that the court or a trustee will take your car when you file bankruptcy; however, once you know more about the bankruptcy process in Waco, Texas, you will likely find that your concerns are alleviated.
In Texas, most debtors choose to file under chapter 7 of the U.S. Bankruptcy Code. In a chapter 7 bankruptcy, the majority of your debts are discharged – which is a court injunction stopping all collection on that debt against you personally. A chapter7 bankruptcy is often referred to as a “liquidation” because the bankruptcy trustee may liquidate non-exempt assets to pay creditors. In Texas, however, that term is misleading due in large part to the extremely generous state exemptions a debtor may use when he or she files bankruptcy. The liberal exemptions typically allow a debtor to keep all of his or her assets in a chapter 7 bankruptcy in Waco Texas, including a vehicle. Texas allows debtors to exempt the total value of one vehicle per licensed household member. You may even be able to exempt the value of a vehicle for an unlicensed household member if the individual relies on someone else to operate the vehicle on his or her behalf. Also, if you have little or no equity in your car, you may be able to keep it even if it exceeds the exemption number. Even if you own your vehicle outright you should be able to keep it when you file bankruptcy.
If you still owe money on the vehicle, however, you might want to consider entering into what is known as a “reaffirmation agreement” during the course of your bankruptcy. Essentially, a reaffirmation agreement simply reinstates your personal liability on your car loan so that your car loan is not discharged like the rest of your debts. You are “reaffirming” your original contract with the lender. You must be current on your car payments before you should ever consider reaffirming that loan.
The vast majority of clients obtain new or used vehicles either right after their Chapter 7 case is filed, or immediately upon discharge. The debt on their former car is discharged and a completely new loan is made to them on a new vehicle. I offer a convenient location to leave the surrendered vehicle, free of charge to you or your lender, so that no one comes to your work or home to repossess the vehicle you are surrendering.
In short, don’t let the fear of losing your car prevent you from considering filing a bankruptcy case! I have lots of options available and you will have a vehicle to drive to work, school, and the grocery store!