Can I Keep My Car 2017-09-06T15:54:36+00:00


As mentioned in A Quick Overview of the Difference between Chapter 7, 11, and 13; some folks believe that you lose everything and honestly that is typically not the case.  It is common that people who file a consumer bankruptcy (Chapter 7 or Chapter 13) end up in being able to keep their property, especially their cars. This is assuming they want to keep those cars and keep making their car payments (if applicable).

Every now and then we have had clients who decide to voluntarily let the car go back to the bank because they are stuck in a car loan that has too high of a payment and or too high of an interest rate.  Although the reasons that motivate someone to file are complicated and nuanced, it isn’t strange to go ahead and get out from under a burdensome, overly expensive, car loan.

Whether you file a bankruptcy or not, the only way to guarantee being able to keep your car is to remain current on your monthly car payments. In the event you are behind on your payments and have been threatened with repossession, you will need to get yourself current and stay that way. If it is your goal to get your payments caught up: this can prove to be difficult through a Chapter 7 as there is no mechanism that will help you get caught up on your payments and is why someone who otherwise qualifies for a Chapter 7 might choose to file a Chapter 13 instead.

You may find yourself confused asking yourself “Why do I have to pay for my car if I want to keep it even though I’ve filed for bankruptcy?” The reason for this is because your car loan is secured or “attached” to your car which is why lenders are allowed to repossess the car if you are not paying on the loan. A bankruptcy alone is not enough to undo the loans attachment to the car. So, in order to keep it, you must continue to pay for it. Contact RS Law today to find out if you are a good candidate for bankruptcy and what that means for you!