If I had a car and the motor burned and I am currently being garnished for it, is it considered to be a secured or unsecured debt?
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If I had a car and the motor burned and I am currently being garnished for it, is it considered to be a secured or unsecured debt?
I am currently in the process of filing bankruptcy. It was financed through the company that is currently garnishing my wages.
Asked on September 1, 2010 under Bankruptcy Law, Louisiana
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
The car is a secured debt because it is a tangible item of property on which funds are owed to the finance company. If the car is worthless because the motor burned, the finance company could still seek to recover a deficiency judgment against you. The deficiency is the difference between the amount you owe the finance company and the amount the finance company would receive if it sold the car.
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