• Spectacular!

    I liked your fast, friendly service. You were all knowledgeable in the area of bankruptcy. Your treatment of me as a client was spectacular! You were great at promptly responding to my questions and concerns. I loved that you provided courteous and quick responses to all my questions.
    --Donna
  • Highly Recommended!

    I have worked with Seth and he is the utmost professional in how he works with his clients. If you need an attorney you can trust I would highly recommend the Law Office of Seth Hanson.
    --David
  • Very Professional.

    Everyone was very professional and efficient. Seth, and everyone that I had contact with were very knowledgeable. I was very pleased with how we were treated by his staff. My questions were always answered promptly. I was very pleased with the service I received and would not hesitate to refer someone to your firm.
    --Anonymous
  • Non-judgmental.

    You were very open and answered all of my questions. You never made me feel like I was asking a dumb question. I was comfortable with your knowledge of the law. It was hard for me to make this decision to move forward in my life. Everyone was friendly to me and respectful. Non-judgmental. Every question I asked was answered promptly and appropriately. I would recommend you.
    --Anonymous
  • More Than Expected!

    I found the firm's representation to be more than what I expected. I was always kept in the loop, all my questions were answered (whether or not I asked more than once the same question), and I felt completely supported by the firm staff when going through this (at times) scary ordeal. Thank you again.
    --Joanna
  • Very Impressed!

    I liked that you had very friendly, caring staff. You were all very knowledgeable. Your treatment towards me was excellent and you quickly responded to all my concerns. If a friend asked of your overall impression, I would say that we were very impressed and we would recommend you to them.
    --Danielle

Bankruptcy And Car Loans

An excerpt from Bankruptcy: A New Beginning by Seth Hanson

I often get asked what happens to car loans in bankruptcy. Here is a rundown of some of the tools and approaches available in bankruptcy.

Chapter 13 Bankruptcy Cram Down

Chapter 13 bankruptcy allows us to cram down your car loan and convert the unsecured portion of the loan into general unsecured debt. This can be huge. For example, if you have a $20,000 loan on a vehicle that’s only worth $5,000, you can cram down the loan to the car’s true value ($5,000). In that case, the $5,000 debt would be paid at a modest interest rate over the course of the Chapter 13 bankruptcy plan and the balance of the loan would be given the same treatment as your credit card debt.

910 Day Rule

You can only do a Chapter 13 bankruptcy cram down on your vehicle loan if the loan is old enough. The car loan must have originated more than 910 days of filing bankruptcy. If you got your car loan less than two and a half years before filing bankruptcy, you won’t be allowed to cram down the car loan in Chapter 13 bankruptcy.

Surrender

If you don’t want to keep paying on the car—because it is a piece of junk or is just too expensive—you can surrender the car with no strings attached. You can surrender the car to the lender through a Chapter 13 or a Chapter 7 bankruptcy. And yes, that means you will have to give the car back to the lender. Once you surrender the car to the lender, you will no longer be on the hook for insurance, registration, or making payments to the lender. Be sure to keep it insured and registered up until the lender takes the car.

Redemption

In Chapter 7 bankruptcy you have the option of “redemption.” Redemption allows you to pay the lender the fair market value of the car and to discharge the loan balance. The difficulty with this option, though, is that you will need to find a new lender to give you a loan to make the redemption payment to the prior lender. And the new loan will often be at a high interest rate.

Reaffirmation

Reaffirmation is another option for Chapter 7 bankruptcy filers, but it’s risky. When you reaffirm a debt you are legally bound to pay the debt after bankruptcy. It will be as though you never filed bankruptcy on that loan. That means you are still on the hook to the lender if your car ever breaks down, you are in an accident where insurance doesn’t cover all the damage, or you lose a job or otherwise lose the ability to make car payments. In these situations, if you have reaffirmed the car loan the lender can sue you even after repossessing the car.

Retain and Pay

The option most preferred by my Chapter 7 clients is to keep the car and continue making payments to the lender. Most car lenders simply want to continue taking your car payment. That is how they make money. They do not want to be in the car repossession business.
Repossession is how they lose money. That is why even without a reaffirmation agreement car lenders almost universally continue to accept your car payments without repossessing your car. For clients who choose this option, I recommend that they call their car lender and personally inform them of their intent to continue making payments.

For more information contact your Fairfield bankruptcy attorney.

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