Filing for Chapter 7 bankruptcy in Florida means meeting certain conditions. One of the things that many people are concerned about is the possibility of having to surrender their home or vehicle. They are worried that this may be deemed necessary in order to meet the claims of their creditors. In reality, this rarely happens.
You can reaffirm or redeem your existing debt
Bankruptcy laws in Florida allow you to choose between a minimum of 3 viable options. You can surrender your car to the lender in order to help pay off the debt that you owe. You can reaffirm the debt by agreeing to renew the loan and begin making payments.
In some cases, you may be allowed to redeem the car for the amount of its value. This is known as the process of redeeming the value of the vehicle. An arrangement can be made with your lender.
How you can redeem your car debt
There is a protocol that you will need to follow when redeeming your car during a Chapter 7 bankruptcy. The idea is to pay the lender either the outstanding balance or the car’s value. The law allows you to choose between these two options. In most cases, you will want to choose the amount that is lower and thus easier to pay back in a timely manner.
The only issue that you may face is that you will normally be required to pay back this amount in a somewhat inconvenient manner. This means paying the amount back in a lump sum rather than through installments. You may be able to get a loan from a specialty lender. However, it’s a good idea to ensure that your interest rate isn’t prohibitively high.