California Attorney Joel Winter Examines Common Bankruptcy Concerns

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Fresno bankruptcy attorney Joel Winter answers two frequently asked questions about bankruptcy.

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Attorney Joel Winter

But should you keep the car? If the car is worth a lot less than what you owe or if your payment is more than you can easily bear as part of your monthly expense budget, you should really consider letting it go in the bankruptcy.

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Filing for bankruptcy is a common occurrence in the United States. In fact, according to United States Courts, although bankruptcy filings fell 6.9 percent for the 12-month period ending June 30, 2016, annual bankruptcy filings still totaled 819,159. “Most people who file for bankruptcy do not know what it entails,” said bankruptcy attorney Joel Winter, founder of the Winter Law Group.

To educate those considering filing bankruptcy, Winter answers the following two frequently asked questions:

No. 1: “Can I keep my car out of the bankruptcy?” The answer is not so simple. “All debts and assets must be listed in a bankruptcy, so technically you can’t keep a car out of a bankruptcy,” noted Winter. “All debts like that are ‘discharged,’ meaning you don’t have to pay the debt on the car anymore. Of course, if you don’t pay the debt, you don’t get to keep the car. However, if you keep making payments despite the bankruptcy, the creditor usually won’t take the car. If you sign a legally binding ‘reaffirmation agreement’ and file it with the court, they can’t take the car, but you also are back on the hook for the entire balance.”

“But should you keep the car? If the car is worth a lot less than what you owe or if your payment is more than you can easily bear as part of your monthly expense budget, you should really consider letting it go in the bankruptcy,” added Winter. “You don’t have to worry about how a repossession looks on a credit report because it will happen at the same time as the bankruptcy and so it isn’t really considered a separate event. Also, it is easier to purchase another car post-bankruptcy than most people realize.”

No. 2: “Can I keep my house out of the bankruptcy?” As far as bankruptcy law goes, houses and cars aren’t much different. They must be listed, and the debt included, and the debt will be discharged.

“Bankruptcy is the cleanest way to walk away from a house. And, like cars, if the amount owed is much greater than the value or the payment is too high, it may be a good idea to leave,” concluded Winter. “Unlike cars, however, houses have a lot of emotion attached to such a decision. Another thing to ask yourself about your house is will you have the house paid off in time to enjoy it in retirement without a payment? A house for most people is not an investment unless it is part of a retirement plan that saves you in expenses when you do retire. If the loan can be paid off then you would only have to worry about insurance and taxes.”

About Joel Winter, Winter Law Group
Joel Winter is a member of the Central California Bankruptcy Association and National Association of Consumer Bankruptcy Attorneys. The Winter Law Group focuses on Chapter 7 and Chapter 13 bankruptcy. For more information, please call (559) 900-3267, or visit http://www.bankruptcyfresno.com. The law office is located at 1057 R Street, Fresno, CA 93721.

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