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Tough times had fallen upon most of the United States and Florida was no exception. People were hardly filing for bankruptcy and it was not because they did not need it any longer, but it was because they could not afford the cost of filing any longer.
Generally, filing a Chapter 7 bankruptcy costs around $1,500 which must be paid before the filing. Many people are struggling with their financial situations, and thus lawyers are coming up with creative ways for their clients to pay the fees.
Debtors with equity in their home are rare to find these days. However, we can easily find debtors who have vehicle equity. Due to high rates of interest and low pay-off amount, debtors frequently pay off their car note early, often with an excess of $2,000 of car equity.
There are many lenders who are ready to loan money to debtors on such cars with equity, but the debtor will have to give them interest of security in the vehicle. This will assure the lenders that despite the debtor having a poor credit, they will be able to use the collateral to recover their investment in case the debtor fails to repay. The debtor will also be able to pay the lawyer’s fees and file for bankruptcy using the loan money.
However, this method is scrutinised. The bankruptcy court considers every appearing transaction suspiciously to make the property uncollectable, which would have otherwise been collected by the creditors. For example, in case of this transaction, equity of $2,000 would be removed from the estate of the bankrupt person. This will be appropriate to do, only if the person gone bankrupt has property exemptions sufficient enough to allow them to keep the full car value before the loan. As long as this is fulfilled, there will be no complications in the transfer.
If you have any queries about affording a bankruptcy, visit Recovery Law Group or call on 888-297-6203.