If I tell the bank to take the car will they automatically take off the $7000 book value of the car from the $9000 that is owed? Or do they only deduct the amount of money they were able to sell the car for. For example if they sold the car for only $3000 dollars.
And i am attending graduate school, would I still be able to get a graduate plus loan student loan as long as I use a co-signer/sponsor on the loan. I am not asking about the guaranteed student loan, I know I can get that even when I claim bankruptcy.
and lastly, I will be getting a settlement for injuries I suffered in a car accident, would they be able to touch my vehicle injury settlement in bankruptcy or without bankruptcy.
The lender will sell the car, probably at the auction and will recover what is called the liquidation value of the vehicle and you will owe the deficiency. The ability of a creditor or a bankruptcy trustee to take all or part of you personal injury recovery depends upon the exemption laws in your state.
Depending upon your other debt and what will happen to the personal injury recovery, you may be a candidate for bankruptcy, or you may want to settle the personal injury claim first and before you file.
As usual, there are a lot of moving parts. You need to set an appointment with an experienced bankruptcy attorney that handles both chapter 7 and chapter 13 cases in your area. Most attorneys will provide an initial appointment at no charge to review your situation and advise you on your options. You can search for an attorney using the Avvo "Find a Lawyer" link at the top of this page.
Answers and comments provided are for general discussion only. My comments are not to be considered legal advice and they do not create an attorney-client relationship.
due to the numerous questions you have you be well advised to seek a consultation with experienced bankruptcy attorney in the area.
With that said, whether any part of your personal injury settlement would be available to the bankruptcy trustee depends upon the exemptions that you have available and how personal injury case is classified. also if you file bankruptcy before you settle your case the trustee has the right to decide whether or not to even allow you to accept the settlement.
as it relates to the car issue what will happen is that the bank will sell the car and whatever they are unable to recover will be a deficiency owed by you. However, that deficiency will be discharged in a bankruptcy proceeding.
Any information provided here is for information purposes only and is not to be construed as legal advice or intended to create an attorney client relationship. Attorney Michael Goldstein is licensed in Massachusetts only and is associated with counsel in RI, MD and DC.
I agree that you should consult with an attorney due to the complex nature of exemptions that are allowed. Just to add to what has already been said. One of the questions every bankruptcy trustee is going to ask you is do you have the right to sue anybody. If you answer yes, and the trustee feels he can recover money for creditors they will pursue on your behalf and you will get $0. You should sit down with an attorney and go over all of the options available to you.
If you turn in the car and DON'T file bankruptcy, the lender will chase you for the deficiency (eventually taking you to court) and also stick you with a tax bill by sending you a 1099 next tax season. If you DO file bankruptcy, they can't chase you for the balance, and there is no tax to pay, even if you get a 1099. The order of what you do doesn't matter (i.e. you can file for bankruptcy before or after giving the car back).
The deficiency will be calculated by the bank's actual recoupment at auction, with a bazillion fees added on.
Under the federal exemptions, you can keep about $23,000 of a personal injury claim, and you might elect to use up to about $12,000 of your wild card exemption towards this as well. So, possibly up to $35K.
I will pass on predicting whether anyone "will" be offered a loan in the future.
Hope this helps!
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