Cars are an important part of our everyday lives, so when filing bankruptcy, we often worry about what will happen to our vehicles. When considering bankruptcy, you may need to make arrangements to keep your car so that you can continue to work, transport your family, and simply live your life. Sometimes people think to sell their car to a trusted friend before they file bankruptcy. Perhaps they even plan to buy it back after their bankruptcy is completed, thinking the court won’t know about it. But is it a good idea to sell your car to a friend before filing bankruptcy?
Can I Sell a Car to a Friend and Buy it Back After Filing Bankruptcy?
Every situation is different, but you should speak to your attorney before you even consider this idea. There is such thing as bankruptcy fraud and it is a crime. Your attorney can advise you on the risks of trying to hide any asset during your bankruptcy proceeding. This is a fairly common tactic, which judges and attorneys have seen many times before.
Can I Keep my Car after Bankruptcy?
During your bankruptcy proceeding, your attorney will work with you to identify your debts and assets. Each debt and each asset should be considered individually to find your best course of action. If there are certain assets you need to keep (such as your car, home, or other physical property), there will be options for you to consider.
One option you my be able to consider is reaffirming the debt that you owe on your car. This essentially means that you exclude that debt from your bankruptcy filing and promise to continue payments on the loan. Of course you must consider whether or not you can afford those payments after bankruptcy. Sometimes you will find that having your other debts forgiven puts you in a better financial situation which allows for this plan. Your attorney may also be able to help negotiate with your debtors to lower your payments to make them more affordable.