How Do I Keep My Car After Filing Chapter 7 Bankruptcy
There are several ways to keep your car after you file for Chapter 7 the most extreme form of bankruptcy. Even if you have a car loan, there are a few options to rework repayments to fit your current budget.
Claim a motor vehicle exemption
- Best for: When you own your vehicle outright.
An exemption is a bankruptcy law that lets you keep certain assets when you file for bankruptcy. A motor vehicle exemption lets you keep a car or other vehicle by protecting some or all of the equity that you own in the vehicle. Most states have limits to how much equity you can claim.
If your cars value is fully or mostly covered by the state exemption, you can keep your car. If not? The contractor appointed to manage your case called the trustee can sell the car to pay off your creditors and reimburse you the exemption amount.
Lets take a look at an example
Say you own a car with a market value of $5,000. You live in a state that offers a $6,000 motor vehicle exemption. After claiming your exemption, you get to keep your car.
But say you lived in a state where the exemption was only $3,000. In that case, the trustee could repossess the car, sell it and send you a check for $3,000.
Claim a wildcard exemption
- Best for: When a motor vehicle exemption doesnt cover the full value of your car.
Reaffirm your car loan
- Best for: When youre still paying off your car loan.
File a motion to redeem
- Best for: Recently purchased or upside-down car loans.
Negotiate down your balance
What Happens To Your Car In Chapter 7 Bankruptcy
If you want to walk away from the car when you file Chapter 7 bankruptcy, you list the lender on your statement and check the box that indicates you intend;
Jul 2, 2020 Lenders take one of two positions with a car loan in bankruptcy. The majority require that you complete a court-approved reaffirmation agreement;
If your lender is suing you for a deficiency balance, filing for bankruptcy relief can stop the lawsuit. A Chapter 7 or Chapter 13 bankruptcy discharge can;
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Redeeming The Cars Current Replacement Value
There is a way to keep your car when you file for Chapter 7 bankruptcy even if its worth more than the exemption limit. You can pay the difference the remaining current replacement value to the lender, and own the car outright. This is called redeeming. Most people filing for bankruptcy, though, dont have the bundle of cash needed to do that. Fewer than 2% go this route.
Auto Loans In Chapter 7 Bankruptcy
With Chapter 7, also known as liquidation, you would give up assets in exchange for being able to walk away from certain debts. In general, people with car loans can consider the five options discussed above, which include:
- Reaffirming the debt.
- Continuing repayment to make the loan current.
- Renegotiating the loan terms with the lender.
- Surrendering the car.
When filing for Chapter 7 bankruptcy, the goal is to get your debt back to a clean slate. Depending on your situation, you may or may not be given the option to keep your vehicle in the process.
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Can I Keep My Car If I File Chapter 7 Bankruptcy In Georgia
Due to the lack of comprehensive public transportation and the distance between the suburbs and the city in the Atlanta metro area, many Atlanta residents who file;bankruptcy;are concerned about keeping their cars after filing bankruptcy under;Chapter 7;so that they can continue to work.
The good news is that you can keep your car if you file Chapter 7 bankruptcy. If you own a car and file Chapter 7 bankruptcy you have three possible options regarding your car: you can surrender the car; you can reaffirm the loan; or, under certain circumstances, you can redeem the vehicle. These options are available for debtors who still have loans on their cars. Debtors who own their cars free and clear may keep their cars, as long as the cars are not worth more than the exemption for vehicles in Georgia.
Surrendering the vehicle in bankruptcy is a relatively straightforward process. You return the vehicle to the creditor, and your obligation on the loan ends, along with your ownership of the car. You may allow the creditor to pick the car up at your home or make arrangements to drop the vehicle off at the nearest location for that creditor.
If you are considering filing for bankruptcy please consult a qualified attorney. For a free consultation please contact the;Law Offices of Charles Clapp;at 585-0040 or email;;for more information.
Dealing With Your Car Loan
If you own a car that you still owe on, youâll have to let the bank and the court know what you want to do with it one one of your bankruptcy forms.
If you want to surrender the car to the lender and discharge the debt, you donât have to do anything other than stop making your payments. The bank will either file request with the bankruptcy court to ask permission to retake the car, or wait until your discharge is granted before picking it up.
If you want to keep the car, you can either reaffirm the loan or redeem the car. If youâre reaffirming your loan, the bank will send you a reaffirmation agreement after your case is filed. You have to complete and sign the agreement and return it to the bank within 45 days from your 341 meeting. The bank files the signed agreement with the court for approval.
To redeem the vehicle you have to file a motion with the court and, once granted, buy the car from the bank for its current value. This gets you out of having to pay the amount left on the loan, but payment has to be made in one lump sum.
Filing for bankruptcy takes some preparation. Hiring a good bankruptcy attorney is one way to file. But if you can’t afford the attorney fees to hire one and you need a fresh start, Upsolve may be able to help. If you’re eligible, our free web app will walk you through the process and help you prepare your forms for filing with the court.
Check out the video below â¬ï¸ to see how it works!
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Can You Keep Your Car After Filing Bankruptcy
There are several factors that go into whether you’ll be able to keep your vehicle through the bankruptcy process. Since your vehicle is considered an asset, and potentially a valuable one, it’s something creditors may pursue when looking to collect debt. Your vehicle may, however, be counted under an exemption that protects it from repossession. In general, the following is considered to determine if you’ll be able to keep your car:
- The type of bankruptcy you’re filing
- Whether you own, lease or are still financing the vehicle
- The value of the vehicle
- What exemptions apply where you live
Read on to learn more about what you can expect to happen to your vehicle when you file bankruptcy.
Can I Keep My Car If I File Michigan Bankruptcy Detroit
Car Without a Loan. If you own your car free and clear of any liens, then your car becomes property of the bankruptcy estate. The Chapter 7 trustee would then;
If you are filing a Chapter 7 bankruptcy and want to keep the car, you must be current on the car loan. If you are filing a Chapter 13 bankruptcy and are behind;
Yes. It is okay if you are behind on your car loan payments. The goal is to eventually be caught up on paying your auto loan. If you want to keep the car, you;
Filing for bankruptcy can be a frightening proposition if youre concerned However, if you do not currently have a car loan, the equity is the full fair;
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Are You Behind On Your Car Payments
If you are behind on your car payments and at risk for repossession, filing for bankruptcy will generate an automatic stay, which will stop creditors from repossessing the vehicle.; At this point you can discuss with a qualified bankruptcy professional options to keep your car. These options include negotiating with the creditor to get car payments caught up, redeeming the vehicle or treating the vehicle in a Chapter 13 plan ;at a lower payment and interest rate.
What Happens To Joint Or Co
Victoria Maydanik California Chapter 13 Bankruptcy
If you have any any joint or co-signed loans or leases, typically your liability for them will be cleared when you file bankruptcy, if the debt is of type that can be discharged. For example, if you co-signed a student loan, your liability for the student loan will not be discharged; but if you co-signed for a car loan or credit card, this liability could be wiped out.
The other person on the loan would remain liable. The creditors efforts to collect from him or her may be slowed down because you filed bankruptcy, and the creditor may even need to get permission from the court to go after codebtor, but ultimately the codebtor is still liable.
Although often you dont have to pay for co-signed loans when you file bankruptcy, you may decide to do it for family or economic reasons. For example, lets say you co-signed a car loan for your child or spouse, and the loan has 20% APR over 7 years. If you file a Chapter 13 case, your plan could include payment for this car loan at 5% interest over 5 years if you wish to be involved, and feel comfortable that it would be financially doable for you.
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Does It Depend On The Type Of Bankruptcy
The type of bankruptcy you go with will significantly affect what happens to your car. If you file for Chapter 7, youll be able to keep your vehicle as long as local bankruptcy laws exempt all your equity and youre up to date on your loan payments.
To figure out how much equity you have in your car, take your loan balance and subtract it from the value of your car. Note that if youre close to the end of your term, you may not have a lot of equity as vehicles depreciate quickly.
After you know how much equity you have, find the motor vehicle exemption in your state. If you have less equity than the exemption limit, you shouldnt have any issues keeping your car. Because Chapter 13 involves a debt repayment plan and doesnt liquidate assets to repay creditors, your property wont be sold. This means if you own your car, it will likely be yours to keep.
Bankruptcy Car Loan Program
Getting a Car Loan After Bankruptcy
Going through bankruptcy is never easy. It can be a confusing and time-consuming experience and may leave you feeling nervous about applying for things like car loans in the future. Despite careful planning, things happen and the need to declare bankruptcy can seemingly come out of nowhere – many responsible borrowers are forced to declare bankruptcy every day, through little fault of their own!
When you’re trying to find a solution that will let you begin fixing your as soon as possible, then our bankruptcy car loan program is just what you’ve been searching for. What many buyers don’t know is that they can qualify for a fantastic car loan that will have you repairing your in no time at all!
At Dutch’s Ford, we don’t think it should be a great challenge to qualify for an affordable car loan that meets your needs after filing for bankruptcy. The unique bankruptcy car loan program we offer is an excellent option available to car shoppers who have gone through a bankruptcy previously, or who are currently awaiting the results of their bankruptcy case.
Begin rebuilding your situation with a manageable car loan – while at the same time landing an amazing deal on a feature filled vehicle that will meet all of you and your family’s driving needs, right near home at Dutch’s Ford!
Dutch’s Ford has the Loan You Need
;Obtaining a Car Loan After Bankruptcy
Qualifying During Bankruptcy
Understanding Your Options
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When Your Car Payments Are Not Current
If you have not kept up with your payments on a car, you may still be able to redeem the car if you can afford to do it. Alternatively, you can try to reach a reaffirmation agreement with the lender that will integrate the overdue payments. However, the lender has a right to take away your vehicle if you are not current on your payments when you file under Chapter 7, unless you can redeem the car.
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Can I File Bankruptcy On A Car Loan When The Car Was Totaled
The good news is that this loan shortfall can be discharged in a bankruptcy, whether a chapter 7 or a chapter 13. There is nothing special about the debt; it is;
Jan 28, 2021 Getting approved for a car loan after bankruptcy may seem impossible. And bankruptcy can show up on your credit reports anywhere from seven to;
Nov 19, 2018 Reaffirm the Auto Loan If youre filing a Chapter 7 bankruptcy and your car loan payments are up to date, you have the option to continue;
Surrendering the vehicle in bankruptcy is a relatively straightforward process. You return the vehicle to the creditor, and your obligation on the loan ends,;
If you bought your vehicle within 910 days of filing your bankruptcy case, you must repay the entire car loan. The good news is that the interest rate you pay;
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Don’t Apply Unless Really Necessary
Before planning to buy a vehicle during your bankruptcy, be sure that you truly need the vehicle. If you honestly need a vehicle to commute back and forth to work or basic transportation for your family, you can proceed with attempting to purchase a vehicle during your bankruptcy. However you should be aware that the judge or trustee appointed to your bankruptcy case will probably scrutinize the purchase and may choose to throw out the purchase.
You Have Other Options When You Have Car Loans
If you have an existing car loan, there are different options you can look into if you decide to keep or let go of your car after your bankruptcy filing.
1. Surrender the Car
If you cannot afford to pay your car loan, you can give back your car, which will wipe out your liability. The lender may wait for your bankruptcy filing before repossessing the car. However, they may also file a motion to the court to lift the automatic stay and get your car as soon as possible.
2. Reaffirm Your Car Loan
If you have a car loan and your equity is lower than your states Motor Vehicle Exemption, you can reaffirm your car loan. You will enter in an agreement with your creditor that you will continue paying your car loan. But you will also have to prove to the court that you can do so.;
3. Sell Your Car
If your equity is much higher than what is exempted, the trustee may decide to sell your car. The proceeds will be used to pay your debts and youll get the $4,000 exempted amount.;
4. Pay for the Remaining Amount
If the remaining amount after the exemption is not that high, you can pay for the remaining amount and keep your car.
5. Redeem the Car
When you owe more than what your car is worth in the market, you can redeem the car so that you can keep it. Youll have to pay the lender the lump sum of what the cars current value is.
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Negotiating A Reaffirmation Agreement
If you can afford to make the payments and are sure that reaffirming the car loan is your best option, you will make this known on your bankruptcy filing statement. The lender will then send you an agreement that may be the same as or similar to your original loan contract. At this point, you may be able to negotiate a better deal.
The lender knows that you have the option to surrender the car and assume no liability. This will usually cause them to lose money, so it is in their best interest to negotiate. Ideally, you will want to request that the principal of the loan be reduced to the vehicles current value. If the lender will not agree to this, you might want to give up the car and let the bankruptcy eliminate your liability.
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