Millennial Pocket
  • Home
  • About
  • Banking
  • Financial Banking
  • Forex
  • Contact Us
No Result
View All Result
  • Home
  • About
  • Banking
  • Financial Banking
  • Forex
  • Contact Us
No Result
View All Result
Millennial Pocket
No Result
View All Result
Home Banking

How Bankruptcy Fixes an Underwater Car Loan

eoe86 by eoe86
April 12, 2023
in Banking
0
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Related articles

#WinWednesday: Minneapolis Bankruptcy Client Discharges $60,000 in Debt and Keeps Everything

June 19, 2025

#WinWednesday: $150,000 in Debt Gone — Including $100K in Student Loans and $50K in Medical & Personal Debt

June 5, 2025

Do you owe more on your vehicle than it’s worth so you can’t sell it or refinance? Are you paying too much every month but no way out? Bankruptcy fixes that problem.

I’m MN Bankruptcy attorney Andrew Walker and I help people escape the debt trap from car loans and truck loans.

When you owe more on a vehicle than the vehicle can be sold for this is called underwater, and you only have a few options to say goodbye to that loan, most of them bad.

Option 1: Voluntary surrender

This means you stop paying and they come and get it or you give it back. The loan company will sell the car for cheap and then sue you for whatever portion of the loan didn’t get paid by the sale. This is often a $10,000 lawsuit against you AND it goes on your credit report as a repossession.

Option 2: Trade it in and get new car with a new loan on it

This seems like a good idea, but you will get EVEN WORSE NEGATIVE EQUITY on the new car loan because they stack the old car loan ON TOP of the new car loan so you owe more than the new car is worth before your first payment. The vehicle is underwater immediately, but the loan balance will be even higher and the monthly payment will be even higher so now it’s worse than before.

Option 3: Pay the loan off

If you have the money, then this is an easy way out of the situation, but don’t borrow from friends or family members until you hear about option 4!

Option 4: File bankruptcy!

This is where I come in. With chapter 7 you can use the vehicle for 3 months without paying on it, then give it back to them and it won’t show up on your credit report as a repossession. In Minnesota, you will get lots of offers for new car loans, and we can even point you to some reputable dealerships. The car you buy AFTER bankruptcy will have a loan balance that is the same as the price of the car, NOT more. Surprisingly, the interest rate won’t be as bad as you think because the bankruptcy will most likely have improved your credit score by then (assuming your score was bad to start with).

Let me say it again. Bankruptcy means you get to stop paying the vehicle note NOW, use it for a few months without a payment, and then buy when your credit score is better. Most of my clients have a credit score of 720 after 2 years, and the score usually goes up 30-50 points the week after filing.

Option 5: Chapter 13 bankruptcy

Watch my next video for how this works. It can even lower your interest rate!

If you live in Minnesota, then click here for a free attorney consultation.

The post How Bankruptcy Fixes an Underwater Car Loan appeared first on Walker & Walker Law Offices, PLLC.

Share76Tweet47

Related Posts

#WinWednesday: Minneapolis Bankruptcy Client Discharges $60,000 in Debt and Keeps Everything

by eoe86
June 19, 2025
0

At Walker & Walker, we help people across Minnesota get the debt relief they deserve—without losing the things they’ve worked...

#WinWednesday: $150,000 in Debt Gone — Including $100K in Student Loans and $50K in Medical & Personal Debt

by eoe86
June 5, 2025
0

Another week, another huge win for someone ready to leave overwhelming debt behind. This week’s #WinWednesday spotlights a client who...

#WinWednesday: Judge Affirms 14-Day Stay in Bankruptcy Relief Motions—Thanks to Attorney Cat Davidson

by eoe86
June 5, 2025
0

Not every win in bankruptcy court is about wiping out debt—sometimes it’s about making sure existing protections are properly enforced....

Bankruptcy vs. Debt Settlement: What’s the Better Choice for Your Financial Future?

by eoe86
June 5, 2025
0

If you’re stuck under a mountain of debt and trying to figure out the best way out, you’re not alone....

#WinWednesday: Minnesota Bankruptcy Attorney Discharges $190,000 in Debt — Including $165,000 in Student Loans

by eoe86
June 5, 2025
0

At Walker & Walker, we help Minnesotans escape unmanageable debt — including student loans — through the power of bankruptcy....

Load More
  • Trending
  • Comments
  • Latest
Inclement Weather Update

Inclement Weather Update

September 26, 2022
What is Deposit Insurance and What Does it Cover?

What is Deposit Insurance and What Does it Cover?

August 15, 2022
Core Code Ambassador Spotlight: Courtney Miller

Core Code Ambassador Spotlight: Courtney Miller

January 31, 2023

Wire Fraud

September 7, 2022

#WinWednesday: Minneapolis Bankruptcy Client Discharges $60,000 in Debt and Keeps Everything

0
Core Bank Breaks Ground on New Sarpy County Location

Core Bank Breaks Ground on New Sarpy County Location

0
How to be a Smart Holiday Shopper

How to be a Smart Holiday Shopper

0
Make Saving Part of Your Resolution

Make Saving Part of Your Resolution

0

#WinWednesday: Minneapolis Bankruptcy Client Discharges $60,000 in Debt and Keeps Everything

June 19, 2025
What is an IRA and How Does it Work?

What is an IRA and How Does it Work?

June 16, 2025
There’s nothing fake about synthetic identity theft

There’s nothing fake about synthetic identity theft

June 10, 2025

#WinWednesday: Judge Affirms 14-Day Stay in Bankruptcy Relief Motions—Thanks to Attorney Cat Davidson

June 5, 2025

About

Investors aim to make money and build wealth over time through the practise of investing. There are a variety of ways to generate future income, and an investment can be defined as any of these methods.

Recent Post

#WinWednesday: Minneapolis Bankruptcy Client Discharges $60,000 in Debt and Keeps Everything

June 19, 2025
What is an IRA and How Does it Work?

What is an IRA and How Does it Work?

June 16, 2025

Categories

  • Banking
  • Financial Banking
  • Forex
  • Home
  • About
  • Forex
  • Banking
  • Financial Banking
  • Contact Us
  • Privacy Policy
  • Terms And Conditions

Copyright@2022 All rights reserved by Millennial Pocket

No Result
View All Result
  • Home
  • About
  • Banking
  • Financial Banking
  • Forex
  • Contact Us

Copyright@2022 All rights reserved by Millennial Pocket

Please wait...

Subscribe to our newsletter

Want to be notified when our article is published? Enter your email address and name below to be the first to know.
SIGN UP FOR NEWSLETTER NOW