In FL after car repossession and bankruptcy, what are my auto options? And how quickly after filing can I get a car again?

Question Details:

I'm almost $1200 behind on auto payments & am thinking of filing for bankruptcy. Once my car is repossessed (in Florida) do I have any rights to it, or is there a certain amount of time I'd have to wait before being allowed to get a loan for a (used) car? As for bankruptcy, how does a Chapter 7 work for this?

Asked 10/15/2009 under Bankruptcy | 826 View(s) | More Legal Topics

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Bankruptcy Law Answers

In such a case you have debtor 3 options available after filing for a Chapter 7:

 1. Surrender your car. Contact the lender and tell them that that you want to turn in or "surrender" your car. Then the lender will sell it; if it is for less than the remaining balance there will be a "deficiency" but this will usually be for less than the amount you owe. The remaining balance, called the "deficiency balance," will be eliminated when you are discharged.

2. Reaffirm your loan.  Reaffirming a car loan means that if you fail to make payments after your bankruptcy is completed, and your lender is forced to repossess, you can be sued for the deficiency. This, however, results in continuing to receive your statements which are reflected on your credit report so it will help you to rebuild your credit.

3. Redeem your loan with a new lender.  In bankruptcy, an owner is allowed to reduce the current car balance to the FMV (fair market value).  This is known as a debtor's right of "redemption". However, to qualify, you must own the car for at least 910 days before filing bankruptcy.  There are companies that will make these type of laons 

These are your options available.  it is advisable that you consult with a bankruptcy attorney in your area.

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