Say you have a vehicle, that for whatever reason, you do not want to keep anymore. Maybe it needs significant repair, maybe you can’t afford it anymore, or maybe you just do not want it. Whatever the reason, you may be wondering whether you can get rid of the vehicle and its loan in bankruptcy? The answer is yes.
When you file either a chapter 7 or chapter 13 case you select whether you want to keep your secured collateral or surrender it back to the lender. This is so both the Court and the lender know what you are doing with the collateral and the associated loan.
Changing Your Mind
What happens if you have filed saying you want to keep the vehicle, but later change your mind? You can still surrender the vehicle back to the lender. Just because you say you want to keep the vehicle and loan in the beginning, doesn’t mean you have to keep it forever. Be careful though, if you signed a reaffirmation agreement in a chapter 7 bankruptcy, you will want to discuss surrendering the vehicle with your attorney before you do. If you have filed a chapter 13 bankruptcy you may have to do a plan modification to account for your new decision.
What Is a Reaffirmation Agreement in Minnesota?
When you file a bankruptcy, and do not sign a reaffirmation agreement, your personal liability on the loan is discharged in the case. Therefore, if you surrender the vehicle back to the lender, the lender cannot collect the balance on the loan from you. You may receive updates about the vehicle that the lender is required to send, like auction notices etc. but these are informational.
CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM
If you are thinking about surrendering your vehicle, reach out to us to discuss your options. Visit www.lifebacklaw.com to speak with an attorney today.
