Q: i owe twice the amount the car is worth i cant keep up with payments, not had a whole yr. got screwed Bankruptcy?
i am 36 yr old woman went to carlot alone & got talked into getting a car thats worth 10,000 for 18,000. i havent had the car 7mo dont wont to buy do i need to file bankruptcy or am i stuck or what?
A: A bankruptcy can be a useful tool in this situation. You could discharge the debt in a Chapter 7 bankruptcy and surrender the car. Alternatively, you might be able to get a redemption loan to pay off the vehicle through the bankruptcy for its fair market value. Talk to a local bankruptcy attorney and they can go into more details about the pros and cons of bankruptcy and the specifics on how redemption works.
A: Mr Dray's answer is a good one. If the loan is only seven months old you cannot use Chapter 13 to reduce the loan balance, though you could possibly reduce the interest. Redemption in a Chapter 7 case would left you pay the current value of the car in a lump sum, a workable solution for people with access to funds or a source of financing. Surrendering the car gets you out of paying for the car, but you will need to have a plan for obtaining other transportation. A bankruptcy attorney could help you look at your total financial picture to determine if bankruptcy is a sensible solution to this problem, and whether Chapter 7 or 13 is the better way to go. I am sorry this happened to you, and wishing you the best.
Bruce Alexander Minnick agrees with this answer
A: Yes you need to file bankruptcy in order to not have to pay the loan. However, you may be able to file a Chap. 13 bankruptcy and do a “cram-down.” i.e., you would only pay what your car is worth PRESENTLY (forget what the dealer SAYS you owe) and, the way cars lose 25-50% of their value 5 minutes after you drive them off the lot, you just might get to pay a LOT LESS , including a lower interest rate on the car you obviously really liked or wouldn’t have bought! Talk to a local bankruptcy attorney about filing a Chapter 13 for you! Good luck!
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