California based company, TEB Law, has recently published a comprehensive guide on bankruptcy relating to car loans. The article aims to help those which are going through or considering bankruptcy. This is accomplished by educating the reader and making them better able to understand the options they have with their car loans and the law.
Thomas E. Brownfield, attorney at law of the firm, explained, "When you file for bankruptcy, your personal liability on all dischargeable debts is extinguished. This includes your car loans." He continued, "The lender can repossess the car but it cannot sue you personally for the balance of the loan. On the other hand, the lender can ask you if you wish to keep the car. If you do so, you can reaffirm the loan and continue with payments." Reaffirming a loan is a re-negotiation of the contract terms after bankruptcy.
This effect comes into play due to the nature of the bankruptcy law. If a debtor with a car loan files for bankruptcy, the creditor cannot sue for the deficient balance. The car can be repossessed and will be noted against the credit score of the debtor. However, if the loan is reaffirmed, installment payments can continue and also contribute towards the credit score of the debtor. Thomas warns against a possible repercussion that might arise after reaffirming a loan, "If you sign the agreement and later default on the payments and the car is repossessed, the lender may sue you for the balance due just as if there were no bankruptcy."
Thomas has offered a free consultation to his clients wishing to understand their options if they are facing financial difficulties. During this consultation Thomas has promised to assess the best route to take regarding their car loan, "A good, reliable car with low mileage is a good car to reaffirm," he explains. "However, the prospect of being sued usually outweighs the need to keep the car. It all depends on the individual circumstances, and careful consideration must be given to any decision taken."
Thomas encourages his clients to contact him regarding their financial needs. His company's official website supports a "Contact us" form that can be used to quickly get in touch with him.
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Contact TEB Law:
Thomas E. Brownfield
877-4 TOMSLAW (486-6752)
teblaw@yahoo.com
1800 E. Garry Ave. Suite 113 Santa Ana, CA 92705
