Articles from Money Law Blog

Here’s a New Year’s resolution to consider:  Get rid of your car.  Your life — and your fiscal health — could improve significantly.  Also, the planet will thank you.
It sounds drastic, but  — if you really think it through — it may not be as crazy as it seems.  In fact, I’ve done it for the past year.  It can be done.  It’s way more feasible than you think.

I have seen a lot of clients recently who have had to file bankruptcy because they turned their cars in to the dealership.  They expected that this it would be a solution to the problem of a car payment they could not afford.  Nope.  Big, big mistake.
Turning in a car to the dealership is, for legal purposes, exactly the same as a repossession.  The dealer goes through the same steps.  The dealer takes the car to auction and sells it — usually to themselves — for way less than the amount of the outstanding loan.

California tax and bankruptcy expert Morgan King writes in his latest newsletter:
“The IRS has begun certifying federal tax debts of more than $50,000 to the State Department, which poses problems for travelers. Why? Because the State Department generally won’t issue passports to taxpayers who have been flagged for delinquencies.

It’s a little-known secret — and too infrequently exercised right of a debtor — to “redeem” a car in Chapter 7 bankruptcy, that is, take the car back from the lender at what the car is worth, not what you owe.
Yes, you heard that right: A debtor in Chapter 7 bankruptcy has a right to take his or her car back from the lender at what the car is worth.