Bankruptcy and Depreciation

If you've ever sold or traded in a car you bought new, you are probably familiar with the effects of depreciation. Over time, things like automobiles wear down and become technologically obsolete. Unless some other factor (like desirability) causes the price to rise, every car will eventually lose much of its value. For someone who is considering filing for bankruptcy protection, the effects of depreciation can catch them off guard.

When you file for bankruptcy, your automobiles are typically exempt from being liquidated (sold) to repay your debts. However, for people with more than one car, selling one of the vehicles can bring in some much-needed income. Bankruptcy often requires lifestyle changes. Although many households require multiple cars, some people may be surprised at how easily they can get by with one less vehicle. If nothing else, having one less vehicle is often better for the environment and saves money on gas.

Unfortunately, if the car you decide to sell has lost much of its value, the windfall its sale brings you might not be as much as you had hoped. You can often maximize your profit by selling the car to another private party, rather than trading it in at a dealership. In the long term, you can increase the eventual return on a resold car by only purchasing cars that hold their value well. Since a car's reliability is a major factor in its depreciation, reliable cars are a sound investment in many ways.

After you have completed bankruptcy proceedings, it may be difficult to purchase a car for some time until you rebuild your credit. At the same time, however, buying a car and making the payments on time can be a good way to build new credit. For this among other reasons, the help of an experienced bankruptcy lawyer can be essential for your long-term financial wellbeing.

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By working with experienced Boston bankruptcy lawyers, you can create a plan for your bankruptcy proceedings that will maximize your ability to get back on your feet afterwards while minimizing the impact on your day-to-day life. To discuss your case with a lawyer, contact the Law Office of Joshua Spirn & Associates today at 800-975-5346