– Hello everybody. I’m Attorney Carmen Dellutri with Dellutri Law Group, and I wanna talk to you today about how to keep your car, if that’s what you wanna do, in Chapter Seven. You have the right to keep your vehicle in Chapter Seven. Now let’s talk generically, at first. Most people have a car payment. So when you’re thinking
about filing bankruptcy, the first question I’m gonna ask you is do you have a lender on your vehicle? Let’s just say you got a 2010 Honda, and the Honda’s worth about $5,000 and you owe about $5,000. That is an easy one for me because if you owe 5,000 and it’s worth 5,000 there’s no equity to protect. You could just keep the car, keep making the regular payments, and that’s what’s called a reaffirmation. You reaffirm the debt, so when you file bankruptcy, bankruptcy’s gonna kill that contract with your car lender. You can reaffirm it, or kinda breathe life
back into that contract, as long as the terms are good for you. It’s not 25% interest, or the payment is just ridiculous, or the car’s falling apart. Standard agreement, you got a good car, you wanna keep it, you wanna keep paying for it, I have no problem with that. One of the problems we face in Chapter Seven is when
somebody owns a vehicle with a lot of equity in it, so let’s say you got a brand new Honda, and it’s worth $15,000, the law only allows you to protect up to a thousand dollars of equity. So we need to have a conversation about that one to see what the car does, how it works for you, what the needs are if you’re family, and then how we can go ahead and protect those, that equity in the vehicle. So, in Chapter Seven, if you wanna surrender a vehicle and give it back, you can do that. You very simply state your intention, I’m gonna surrender this vehicle. If you wanna reaffirm it, you could say to the lender, hey I wanna keep my car and keep paying for it, and then you sign what’s called a reaffirmation agreement. There’s another alternative
called a redemption. Let’s say, for example, you owe $20,000 on a car that’s worth five. I know that’s an extreme example, but believe it or not, this happens. You can actually go in
and file what’s called a motion for redemption
and say to the court, judge, this car is worth five grand, I owe 20 grand. The theory behind a
redemption is very simple. If you were to give that car back, that lender is only
gonna be able to go out, take the car back, and go out on the open market and sell it for $5,000. And then the rest of the
claim gets discharged by the bankruptcy, so the lender’s only gonna get five grand. You’re saying to the lender, I’m gonna give you five grand right now, not over time, not a new loan agreement, right now. And that’s what the car’s worth. But you have to come up with all that money right away. So, that’s something to talk about with the attorney. If you have a car that’s got a little bit of a problem, feel free to sit down with your attorney, and discuss the best way for you to keep your vehicle in Chapter Seven. If you have any questions, or you’d like to talk to us further, please feel free to call
the Dellutri Law Group. You’ll sit down with one of our attorneys, and talk about how to keep your car in Chapter Seven. At the end of this video, there’s gonna be a link to teach you how to save your car if you’re gonna file Chapter 13. So, I look forward to
helping you in the future. Again, I’m Carmen Dellutri with Dellutri Law Group. You have a great day.