The Allmand Law Firm, PLLC Difference

Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

Chapter 13 Bankruptcy - Keeping Your Car

Posted By admin || 9-Dec-2008

Since the 2005 changes in bankruptcy law, including a vehicle in a Chapter 13 bankruptcy is a lot more complicated. The bankruptcy law states that if you are filing a Chapter 13 bankruptcy and you purchased your vehicle less than 910 days ago, you are required to pay the full balance and interest you owe on the car during your Chapter 13 bankruptcy.

In other words you won't save a dime. The only perk you get is to keep the vehicle. But if you're filing Chapter 13 bankruptcy and you purchased your vehicle more than 910 days before filing bankruptcy, the bankruptcy trustee may allow you to pay the "fair market value" of the vehicle, plus reduced interest. Because most cars depreciate significantly during the first 3 - 4 years, the "fair market value" you will pay will most likely be significantly less than your original car loan.

Since the Chapter 13 bankruptcy 910 day rule is still evolving, many judges interpret the rule differently. That's why if you're filing Chapter 13 bankruptcy and have a vehicle (with a loan) it is critical that you speak with your bankruptcy attorney about any recent changes in the 910 rule and how it will affect your Chapter 13 bankruptcy case. It is very important that the 910 day rule be approached properly because it could end up becoming very costly for anyone filing Chapter 13 bankruptcy.

Categories: Chapter 13 Bankruptcy
Blog Home