For Tampa area residents struggling with automobile payments, Chapter 13 Bankruptcy may offer some relief. A Debtor filing Chapter 13 Bankruptcy can employ numerous strategies to not only achieve a lower monthly automobile payment but in some cases, also the arrangement to pay only the true fair market value for his or her automobile.
The Tampa Bankruptcy Court appears to hold the minority rule in the treatment of automobiles in Chapter 13 Bankruptcy. Every Bankruptcy Court in the United States will generally hold that if a Debtor seeks to “value” or to pay only the true fair market value of the automobile, through the Chapter 13 Bankruptcy, then the Debtor must have owned the automobile for more than 910 days. This is referred to as the 910 day rule.
There is a number of generally recognized exceptions to the 910 day rule. If the Debtor purchased the vehicle for a primarily business purpose, if the vehicle was purchased for the use of another person, or if the automobile or vehicle loan was rendered for a vehicle already owned by the Debtor, then the Debtor may seek to pay only the true value of the vehicle through the Chapter 13 Bankruptcy, although the Debtor may have owned the automobile less than 910 days.
The majority of the Bankruptcy Courts appear to hold that if the Debtor meets one of the above exceptions to the 910 day rule, then it is irrelevant how long the Debtor owned the vehicle. The minority rule is if the Debtor meets one of the exceptions, he or she must own the vehicle for at least a year in order to value the automobile. The Judges in the Tampa Bankruptcy Court appear to favor the minority rule.
In the Tampa Bankruptcy Court, a Debtor may also seek to pay the balance of the vehicle over a period of up to 60 months, often with a reduced interest rate. This option is sometimes employed by Debtors who do not satisfy the requirements of the 910 day rule. However, this option may for some Bankruptcy filers, dramatically reduce their monthly automobile payments, and save a significant amount of interest paid to the lienholder or lender.
A final option for a Tampa automobile owner is to simply surrender the vehicle through either the Chapter 13 or Chapter 7 Bankruptcy.
For those residing in the Tampa Bay area, there are many options given in Bankruptcy proceedings pertaining to a filing Debtors automobile or vehicle. Chapter 13 or Chapter 7 Bankruptcy can afford additional relief from unsecured debts, such as credit cards, medical bills, as sometimes even tax debt and student loans.
If you are considering Bankruptcy, and reside or work in Tampa, our office is conveniently located on Westshore Boulevard, close to the Dale Mabry intersection. We also have offices in Clearwater, Port Richey, and Lakeland.
If you are considering Bankruptcy please contact our office either through our website or simply by calling our office. The Toll Free Number is 1-800-407-3328. Since 1993, Weller Legal Group has represented many persons throughout the greater Tampa region in Bankruptcy matters.
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