Car Loans for Chapter 7 Bankruptcy
Chapter 7 bankruptcy provides an "order of relief" that triggers an
"automatic stay" thus all creditors and collectors are prohibited from
pursuing you or your property outside of the bankruptcy proceeding.
Note: This is especially important if you've received a foreclosure
notice!
Chapter 7 bankruptcy is also known as a "straight bankruptcy" or
"liquidation bankruptcy" because the Trustee gathers and sells your
nonexempt assets and then distributes the proceeds to your creditors in
accordance with the provisions of the bankruptcy code.
You are permitted to retain certain "exempt property" but all remaining
assets are liquidated by the bankruptcy court Trustee. You should also
understand that if you file a chapter 7 bankruptcy you could loose some
or all or your property! This may be an advantage or disadvantage
depending on how much equity you have in the asset.
The Chapter 7 Bankruptcy Code allows you to keep property or assets by
claiming them as "exempt" under either Federal or State exemption laws;
whichever applies to your State.
You gather the following information: creditor's names, addresses and
amount of debt; source, amount and frequency of your income; a list of
all your property and detailed list of your monthly living expenses.
Fill out the required bankruptcy forms (also called petition or case
file)
File your bankruptcy in the nearest federal court
The court issues an "automatic stay" that stops all collection actions
and prohibits creditors from initiating/continuing lawsuits or wage
garnishment, even telephone calls demanding payment must stop!
Usually about 20 to 40 days after filing your petition, the court will
notify you of the 341 meeting which you must attend and generally takes
only 10-15 minutes. The purpose of this meeting is for creditors (if any
even show up) to question your claim that you are unable to pay your
debts. Creditors want to know if you could pay at least 50 cents on the
dollar, and if not, they won't waste their time objecting to the
discharge.
The court accepts your petition and the Trustee liquidates (sells off)
any nonexempt assets (if you have any).
60-90 days later the court grants your discharge and send you the
official discharge notice via mail a few days later.
With discharge notice in hand, you are officially released from having
personal liability for any discharged debt. (Creditors cannot take
action against you or your exempted property)
If you need to purchase an automobile while in a chapter 7, you must
wait till after the 341 hearing has been held. If no creditors show up
for this hearing you are good to go.
Webmaster of Car Loan Financing.Com
Auto Loans after Bankruptcy
