when you file for bankruptcy can you keep your car?

Question

does it pay it off or do you continue regular payments

Answer 1

Usually you are allowed to keep one car. (You need transportation to get to and from work in order to pay the court!) However, it does depend on how your bankruptcy is structured.

Have seen cases where b/c car was in both the company & the individual's name that initially the car was not included in the assets / debts "refinanced/ charged off" in the bankruptcy AS LONG AS THE ACCOUNT WAS KEPT CURRENT. Once this person became delinquent (3-4 payments), the finance company reviewed the account and the creditors credit report. They then accelerated the note requiring the full payment of the remaining balance not just the 4/9 payments remaining.

However, in most cases a car loan is a secured creditor (they hold the title on the vehicle until paid in full) and will be included in the debt to be reorganized. Your payments maybe reduced but number of payments extended - still paying directly to the finance company. Or included in your payment to the bankruptcy trustee/court who distributes payment to the various creditors.

Check with a bankruptcy attorney. Many do not charge for the initial consultation. With the change in the law regarding bankruptcy - unsecured debt - credit cards - have much stricter regulations / criteria to meet in order to be included in a bankruptcy...your level of income. I believe you cannot make more than $32 - $36,000 per year to be eligible to include unsecured debt. Don't quote me. Do a search on bankruptcy laws after 10/17/2005 - date the new regs went into effect.

Most finance companies - well like Chrysler Financial, GMAC - will try to work with you if you call them and explain your situation. In this case it is better to ask permission rather than ask for forgiveness....

Good luck. In today's society, this is more common than you think. What i mean is dont let it ruin your world. Just be positive and work you way through. There is a light at the end of the tunnel. You are already being proactive - just keep it that way!


Check this site out, it has lots of information.
http://www.totalbankruptcy.com/

Answer 2

Most bankruptcy courts will allow you to keep your car. The car loan should be reduced to what the current value is, not based on the original loan amount. Your car payments will be included in your monthly payment to the court's trustee.

You should call a local bankruptcy attorney to get professional advice.
http://www.bcsalliance.com also has some information that might help you.

Answer 3

You can, you would contact the lien holder (finance company), and tell them that you are filing bankruptcy and you wish to keep paying and keep the car.

Most car finance companies would rather that you pay your debt rather than repo your car.

Answer 4

It all depends on how your bankruptcy is structured. Ask a bankruptcy lawyer.