Can I Keep My Car During Chapter 7 Bankruptcy?
If you are filing, or thinking about filing, for bankruptcy you might ask; "Can I keep my car during chapter 7?" The answer is yes in some cases, but it depends on the status of your auto loan. In some cases keeping your car is not the best financial decision for you. In those cases there are ways to get car loans for bankrupt people.
Options for Keeping a Vehicle During Chapter 7
In the case of filing for a chapter 7 bankruptcy if you need to keep your vehicle, you have options! At your 341 meeting, your trustee will ask you three questions pertaining to your vehicle:
- Do you own the car outright?
- Are you current on your payments?
- Are you behind on your payments?
If you own your car outright you will most likely be able to keep the car if the value is under your state's exemption limit. If the vehicle is over the exemption limit then you will be responsible for repaying the difference.
Because you are filing for bankuptcy, you most likely will not have the cash laying around to make up the difference meaning you will be forced to liquidate the car also. If that is the case there are ways for you to finance a car after bankruptcy, using a special finance lender, like the ones we work with.
Being current on your payments allows you to reaffirm your auto loan. This means you are renewing your loan with the lender, and must be able to prove that you can afford the monthly payments. If you are not able to afford the payments, and you default on the loan, the lender has the legal right to repossess the car regardless of the bankruptcy.
You may redeem your car loan if you are currently behind on your monthly payments. This means that you can buy the car outright for the value amount of the car. The downside to this option is that you will need to have the money in a lump sum, and again since you are filing for bankruptcy, that is not likely.
Starting Over with Bankruptcy Auto Loans
If after weighing your different options you decide that financially you are unable to keep your car because you either owe more on the car than what it is valued at, or you would just rather liquidate the asset to repay your creditors, Bankruptcy Auto Financing can help you. You can start today by filling out our online application. You will be contacted with your approval information, and we will try our best to get you set up with a bankruptcy car dealer that is willing to help you.
Please remember we are not lawyers and cannot give any legal advice. This article is only pertaining to different circumstances we have experienced over the years, and may vary with each customer.
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