Securing Auto Loans While in Bankruptcy – What it Entails | Articles | auto loan Auto Loans bankruptcy creditor debtor debtors disposable income financial distress good solution liquidation repayment plan securing auto loans unsecured creditors

Securing Auto Loans While in Bankruptcy – What it Entails

May 18th, 2009 admin Posted in Auto Loans | No Comments » 142 views

There are two common chapters used in solving financial distress cases. These are chapter 7 and chapter 13. Chapter 7 or the liquidation rule allows for the debtors property to be sold and the proceeds divided among the unsecured creditors. These do not include students loans, spousal support or child support and therefore they cannot be discharged under this chapter.

Under chapter 13, the court appoints a trustee whose responsibility among others is to schedule a repayment plan. The debtor must follow this for a period not exceeding five years. It is important to know that acquiring bankruptcy auto loans is treated differently in accordance to the chapter under which the distress has been filed. If filed under the liquidation chapter, the debtor has to go through the means test where the court looks into the debtors disposable income to determine whether the debtor will qualify for this.

The second step is the 341 meeting. This is a meeting between the creditor trustees and the debtor under an oath that confirms a list of his assets. Bankruptcy auto loans cannot be granted if the meeting has not been held. Many people find it more comfortable to have their own mode of transport and though they might be financially distressed, bankruptcy auto loan may be a good solution to this problem.

Under chapter 13, one should seek authorization before they can be allowed to acquire debt to buy a car. Without the required authorization, this might not be possible. Once the order has been acquired, the debtor will be allowed to seek the opinion of the bank on the issue.

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