Can You File Bankruptcy On a Title Loan?
If your debts are out of control and you feel stuck, you might wonder if you can file bankruptcy on your title loan.
While bankruptcy is a legal process that can help you manage your debts, it’s not the only solution. Read this blog to learn about the different types of bankruptcy and find out if you’re eligible to keep your car after filing.
Types of Bankruptcy
There are two main types of bankruptcy. Now, which one of these types is right for you totally depends on your financial situation.
1. Title Loan and Chapter 7 Bankruptcy
Chapter 7 bankruptcy often provides maximum debt relief by erasing credit card and medical bills and allowing individuals to get rid of tens of thousands of dollars in debt.
However, Chapter 7 bankruptcy usually won’t help you get rid of a title loan since your car was used as collateral. This means the lender can repossess your car if you can’t make the payments.
But that doesn’t mean bankruptcy is useless. If you have a lot of other debts, Chapter 7 can help you get rid of them. This extra money could help you pay off the title loan and keep your car.
In a situation like this, it’s important to talk to a bankruptcy lawyer. They can help you understand your options and choose the best path forward.
2. Title Loans and Chapter 13 Bankruptcy
Chapter 13 bankruptcy may be a better option if you have debts that Chapter 7 cannot help you get rid of, such as a title loan, and if you wish to retain your assets like your house or car.
With Chapter 13, you create a plan to repay your debts over time, which can include lower interest rates and smaller payments. You’ll typically make payments for three to five years, and after that, some debts might be forgiven.
Not only that, Chapter 13 can help you save your car by allowing you to catch up on your title loan payments and avoid repossession. It can also simplify your finances, combining your debts into one manageable monthly payment while ensuring you have enough money for your basic needs.
Can I Keep My Car If I File for Bankruptcy?
You might be able to keep your car after filing for bankruptcy. If your car is worth less than $4,450, or you owe more on it than it’s worth, you could protect it during bankruptcy. This means you get to keep the car.
However, if you’ve missed car payments, the lender can still take your car back, even if you file for bankruptcy.
The Bottom Line
If you’re unsure how you’ll manage your debts and want to learn more about bankruptcy, the filing process, and other debt-handling options, call Advantage Finance LLC. We can help you understand bankruptcy and whether you can file for bankruptcy on your title loan.
We will collaborate with you to achieve the best possible results while protecting your valuable assets. So, what are you waiting for? Dial (281) 410-5337 to get in touch with us today.