If you are considering declaring Miami bankruptcy, there are several things you need to know in regard to your vehicle. A Miami bankruptcy lawyer can help you navigate the confusing process of declaring, but it is still important for you to understand the consequences of your action. If you own a vehicle, you will have several options from which to choose then you declare. Some let you keep your car and some let you use the car to pay down your debts.

Those opting for Chapter 7, which is sometimes known as liquidation, are entitled to keeping some of their property. Whether or not this will include your vehicle depends on a few factors, but there are times when vehicles are protected by Chapter 7. Regardless of whether you are keeping it or not, let your attorney know you own a vehicle and also let the courts know. You will need to fill out a document that covers information about the vehicle and its value. You are also likely to be asked if you use your vehicle for getting to and from work.

Those who own a car outright do not have to worry about its being seized. However, if you owe money on it and make payments, you have more to worry about. You can still keep the car, but you will need to use something called reaffirmation or redemption. Reaffirmation provides an arrangment with the lender in which you continue to make payments and the car is not covered under your declaration. This is a voluntary process and must be approved by the court and by the lender. You will be held responsible for the debt and could risk further loss if you lapse on your payments. Redemption is a process in which the car is covered under the declaration, but you have the option of buying it back from the court at its current value. Basically, you pay the lender what they would sell the car for at the time of your declaration. Should you choose to include your car in the declaration, you simply lose the car and it falls under the court arrangement.

In cases in which you are no longer making payments on the car, because the loan or car was paid in full, you will be able to keep it as long as its value is less than a certain amount. This amount is determined by each state. In this case, the car is considered an exemption. The equity needs to be less than the capped amount. The equity is determined by the difference between anythign owed and the current value. If the equity is great than the state cap, lenders can repossess the car in order to receive what they are owed.

Determining whether you or not your vehicle will be protected if you declare is a complicated procedure that is often tough to understand. Laws differ from state to state, so even if you were comfortable with them in one location, you might be confused if you relocate. This is why it is important to work with an experienced professional when you begin the declaration process.

Author Bio: Penny Lane recently spent time researching bankruptcy with the help of a Miami bankruptcy law firm. She hired a Miami bankruptcy lawyer to represent her sister.

Category: Legal
Keywords: Miami bankruptcy,Miami bankruptcy lawyer