Filing for bankruptcy can be an overwhelming experience, especially when you’re concerned about losing your car in the process. Fortunately, there are options available that may allow you to keep your vehicle while still obtaining debt relief.
A bankruptcy lawyer in Colton, CA can explain the redemption process, which could be the solution you’re looking for. Contact Law Offices of Terrence Fantauzzi at (909) 552-1238 for a consultation with a bankruptcy attorney.
Typical Options for Your Car During Bankruptcy
When filing for bankruptcy, one of the most challenging aspects for many individuals is figuring out what will happen to their car. In most cases, people owe more on their vehicle than it’s worth by the time they file for bankruptcy, but they still need the car for essential tasks like getting to work or taking their children to school.
Common Choices for Vehicle Debt in Bankruptcy
The usual options for dealing with a car in bankruptcy are not always ideal. You can try to keep the car by continuing to make payments on your existing loan. However, many individuals are behind on their payments, which can make this option difficult. Another choice is to surrender the car to the lender, but this leaves you without reliable transportation. Fortunately, a bankruptcy lawyer in Colton, CA can help you explore a less common but often effective alternative—the redemption process.
What Is the Redemption Process?
The redemption process allows you to keep your car while paying your lender only the fair market value of the vehicle, rather than the full amount you still owe. This can be especially beneficial for those who owe significantly more on their car than it is worth. By redeeming your car, you may reduce your monthly payments and avoid the need to give up the vehicle.
How Redemption Works
In a Chapter 7 bankruptcy, the redemption process gives you the option to pay your creditor the current market value of the car in a lump sum. While this may sound difficult, especially during bankruptcy, it can save you money in the long run. If you can secure the funds—either through savings, a loan, or assistance from family—the redemption process could be a viable way to retain ownership of your car.
A bankruptcy lawyer in Colton, CA can help you evaluate whether this option fits your financial situation and guide you through the necessary steps to complete the process.
Benefits of the Redemption Process
The redemption process offers several advantages for debtors who want to keep their vehicle while dealing with the financial difficulties of bankruptcy. By paying only the fair market value of the car, you could potentially lower your monthly payments or shorten the repayment term.
Is Redemption the Right Option for You?
While the redemption process can be helpful, it’s not for everyone. The primary challenge is securing the lump sum payment needed to redeem the vehicle. If you’re unable to gather the necessary funds, this option may not work. However, for those who can make the payment, redemption can provide significant financial relief by lowering the total amount you owe on the car.
Speaking with a bankruptcy lawyer in Colton, CA is the best way to determine whether this option is suitable for your situation and to explore alternatives if needed.
Take the Next Step: Learn More About Your Options
If you’re considering filing for bankruptcy but are worried about losing your car, it’s important to explore all available options. The redemption process may be the solution you need, but other possibilities might also fit your situation better.
To learn more about how the redemption process works and whether it’s the best choice for you, contact Law Offices of Terrence Fantauzzi at (909) 552-1238. We offer free bankruptcy consultations to help you understand your rights and options, so you can make informed decisions about your financial future. Don’t let the fear of losing your car stop you from seeking the debt relief you need—call us today!