If you own your vehicle outright, or have equity in your vehicle, you can keep it in Chapter 13, as well as in Chapter 7 if it is protected by state bankruptcy exemptions. In Pinal County, Arizona, a single filer may have up to $6,000 equity in a vehicle. A married couple may either have two vehicles worth $6,000 each or one vehicle with up to $12,000 equity.
If you are behind on your payments, Chapter 13 bankruptcy may provide you with a path to catch up, save your vehicle, and address other debts. Your past-due balance will be spread out over the course of 3-5 years, giving you plenty of time to catch up on payments. However, the entire balance of your auto loan must be paid in full in a Chapter 13 plan. For more information, contact our office to speak with one of our Tucson bankruptcy lawyers.
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