Can I trade in my car that is part of a Chapter 13 bankruptcy?
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Can I trade in my car that is part of a Chapter 13 bankruptcy?
My car is becoming to costly in repair. I am two yrs into the bankruptcy and have only two years left on the car. I am assuming either A. I need to keep the car no matter what. or B. Is there a way to amend or the bankruptcy if it were traded in and we took on a new payment.
Asked on June 25, 2012 under Bankruptcy Law, Washington
Answers:
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
You probably will not be approved for a new loan based on the bankruptcy being on your credit report so option B probably won't occur for you. You need to choose either to continue paying on the motor vehicle by having the court lift the automatic motion to stay and with the lender's agreement, allow you to continue payment on the car or you need to see if the blue book value of the car is more than what you owe. If so, maximize the return and sell the car in a private sale and pay off the loan and with any funds left over, purchase a motor vehicle for cash.
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