Not everyone realizes that there is more than one type of bankruptcy. After all, portrayals of fictional characters going through bankruptcy often end up being vague, giving only the bare minimum of information. As a result, some people in Pennsylvania might be surprised to learn that saving the car during bankruptcy might be easier than they thought. This is particularly true for those who are filing for Chapter 13 bankruptcy.
In Chapter 7 bankruptcy, a portion of a person’s assets are usually sold off to satisfy creditors. After this, the remainder of the filer’s debt is discharged. This is not how Chapter 13 works. People who file for Chapter 13 bankruptcy are usually those who have the financial means and income sufficient for a three to five year repayment plan. Unsecured debts left over at the end of the repayment plan is discharged.
But what if someone qualifies for Chapter 7 bankruptcy and wants to keep their car? This is not an uncommon situation. People struggling with their debt do not have to put off filing for bankruptcy out of fear that they will lose their primary mode of transportation. Things like vehicles, primary residences, clothing items and household furniture are usually exempt from being sold to satisfy creditors.
Saving the car is an important factor for Pennsylvania residents who are considering bankruptcy. Unfortunately, widespread misinformation leads many to believe that seeking bankruptcy will leave them with absolutely nothing, meaning they will have to start all over from the ground up. In reality, bankruptcy can help people regain an important sense of financial stability and security.