Can I Keep My Car Missouri 2017-09-06T19:24:39+00:00


It’s amazing what some bad press and pop-culture references can do to almost certainly cement Bankruptcy’s reputation as the worst-case scenario when in reality it is far from it. Contrary to popular belief, it’s actually quite common that folks who file for bankruptcy (Chapter 7 or Chapter 13) end up in being able to keep their property, especially their own vehicle.  This, of course, is assuming the bankruptcy filer wants to keep their car as well as keep making the associated car payments.

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Despite being able to keep your car, not everyone wants to do so. From time to time clients decide to let their car go back to the lender voluntarily for a number of reasons. Sometimes the car payment is too high; the car’s value is far less than what is owed on the loan (also known as “upside down”); loss of a job has made keeping up with car payments impossible; or some combination thereof.  The reasons for filing Bankruptcy itself are often more complicated than saving, or getting free from, a car; but honestly isn’t odd when it is a major factor.

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.

It is important to keep in mind that whether or not you end up in Bankruptcy there is only one avenue you can take to make sure you can keep your car and that is to remain up-to-date on your car payments. Please note that “up-to-date” does not mean within the grace period. It truly means that your car payment due date has come and gone and you made your payment. Should you find yourself receiving threats of repossession due to being behind on payments Bankruptcy will put a stop to that threat, permanently or temporarily depending on which Bankruptcy you end up filing. Which bankruptcy you should file depends on your goals.  For example, if you want help getting your payments caught up you may want to choose a Chapter 13 even if you are a good candidate for a Chapter 7. The reason being that getting “caught up” on payments can prove to be difficult through a Chapter 7 as it doesn’t provide any instruments to help you get your past-due payments caught up. Chapter 13, on the other hand, is designed to help you pay back your debts and get yourself caught up on the ones you are behind on. This is a good example why someone might qualify for a Chapter 7 ultimately choose to file a Chapter 13 instead.

For more information on Bankruptcy law, whether you should file, and what it means for your car Contact RS Law today to find out if you are a good candidate for bankruptcy and what that means for you!