Can you file bankruptcy and keep your car?
For many people their car is their most valuable asset. So it’s no surprise that one of the most common questions we get is “Can I keep my car if I file bankruptcy?”
The answer is maybe. It depends on a few factors including the type of bankruptcy you file the value of your car and whether you’re current on your payments.
Here’s a closer look at each factor:
Type of bankruptcy: If you file Chapter 7 bankruptcy the court may sell your assets to pay your creditors. If you file Chapter 13 bankruptcy you may be able to keep your car if you can afford to make your payments.
Value of your car: If your car is worth more than what you owe you may be able to keep it. But if it’s worth less the bankruptcy trustee may decide to sell it and use the money to pay your creditors.
Whether you’re current on your payments: If you’re current on your payments you’re more likely to be able to keep your car. But if you’re behind on your payments the lender may try to repossess your car.
To find out if you can keep your car it’s best to speak with a bankruptcy attorney. They can evaluate your situation and give you the best advice on how to protect your assets.
Can you file bankruptcy and still keep your car?
Yes you can file bankruptcy and still keep your car as long as you continue to make payments on the loan.
What type of bankruptcy allows you to keep your car?
Chapter 7 bankruptcy does not require that you surrender any of your property to the bankruptcy estate.
What type of bankruptcy may require you to give up your car?
In a Chapter 13 bankruptcy you may be required to give up your car if the value of your car is more than the amount you owe on the loan.
How can you keep your car in bankruptcy?
You can keep your car in bankruptcy by either reaffirming the loan or redeeming the car.
What is a reaffirmation agreement?
A reaffirmation agreement is a contract between you and the lender that states you will remain liable and responsible for the debt and will continue to make payments on the loan.
What is redemption?
Redemption is when you pay the lender the value of the car in one lump sum.
What are the benefits of a reaffirmation agreement?
The benefits of a reaffirmation agreement are that it allows you to keep your car and improve your credit score.
What are the benefits of redemption?
The benefits of redemption are that you can keep your car and it may save you money in the long run.
What are the drawbacks of a reaffirmation agreement?
The drawbacks of a reaffirmation agreement are that it may negatively impact your credit score and you may still lose your car if you don’t make payments.
What are the drawbacks of redemption?
The drawbacks of redemption are that you may have to pay more money upfront and it may negatively impact your credit score.
How long does a reaffirmation agreement last?
A reaffirmation agreement typically lasts for the life of the loan.
How long does redemption last?
Redemption typically lasts for the life of the loan.
What happens if you default on a reaffirmation agreement?
If you default on a reaffirmation agreement the lender can repossess your car.
What happens if you default on redemption?
If you default on redemption the lender can repossess your car.
What is gap insurance?
Gap insurance is insurance that covers the difference between what you owe on your car loan and the value of your car.
