Is there any possible way to keep a car when filing a chapter 7?

Question

I’m thinking about filing a chapter 7 so I can be cleared from overwhelming medical bills. I have no student loans or credit card debt. I also don't owe any taxes. I recently bought a car and owe about 7,000 for it. If I include it in my chapter 7 what happens to it? Do I keep making my payments or does it get taken away from me? Or possibly no more car payment? Not sure what to expect. I also do not own a home. I am single.

Cary Smalley · Answer

Yes, each debtor is entitled to exempt one vehicle in Chapter 7.  As long as you continue to make your payments you can keep your vehicle.

Leeann Thornhill · Answer

Yes!  You can keep your car when you file Chapter 7.

Charles Schneider · Answer

Yes by appropriately exempting it.

Michael Avanesian · Answer

Yes, you can easily keep your car by exempting it. I suggest that you get an attorney though because while going through a Chapter 7 itself is not that hard, without the proper guidance you end up stressing out about many stupid things and once in a while terrible things happen. Why risk any of that.

John Moffa · Answer

First, for you and anyone who reads these questions and answers, you must list all of your assets and all of your debts.  Period, no exceptions.  You may not pick and choose.  With that being said, a Chapter 7 Trustee will be appointed in the case and will determine the value of the car, subtract the various claimed exemptions you choose and whether they are legally sufficient, subtract the amount owed on the vehicle and see if there is equity which needs to be liquidated for the benefit of the creditors in the case.  So if the vehicle is worth $19,000 and only you are no the title, then the most you could claim as exempt is $6,000, but that number will certainly be less. Subtract the exempt amount from $19k and subtract the amount owed from the amount after subtracting the exemptions and you have the equity.  The larger the equity, the more you have to pay the Trustee.  The exemption amount will vary on other factors in your case and I cannot determine that without much more information.

Christopher Kane · Answer

As long as you keep your payments current on the auto loan the lender cannot repossess it.  The issue in bankruptcy will be whether you have any equity in the car, whether the car is worth more than you owe on the loan.  You are entitled to a $3,000 "exemption" on the equity in the car.  If you have less than $3,000 in equity, then the bankruptcy Trustee will not take an interest in the vehicle.  If have more than $3,000 in equity (you have "non-exempt equity") than you can work a deal with the Trustee to pay the Trustee the amount of the non-exempt equity and keep the car.

Jeffrey Cogan · Answer

Yes, you can keep your car but you will have to file a reaffirmation agreement to keep the car.  You should keep making your payments and wait for the reaffirmation agreement.

Sanford M. Martin · Answer

Debt for autos is typically reaffirmed in Chapter 7 bankruptcy. Debtor and lender agree on the payoff, payments, etc, then sign an agreement which is filed as part of the bankruptcy. Depending on your equity in the car and other personal property, it may affect your obligation to the creditors which is the total of your personal property less the exemption due you. If you don't claim a homestead exemption, in Florida you may claim the wildcard exemption which is $4,000 in addition to the $1,000 for auto exemption and $1,000 for personal property. It is advised to analyze your financial situation before you make such decisions.

Daniel Winter · Answer

Yes, you usually can keep your car when you file a bankruptcy. Most car lenders allow you to keep the vehicle as long as you are up to date in  the payments, and have full-coverage insurance. Also, in most cases, the car lender will require you to sign a "reaffirmation agreement" for you to keep the car and still be responsible for making all the payments.  It is important that you talk to an experienced bankruptcy attorney to review your whole situation and how a bankruptcy case would work for you.

Michael McFarland · Answer

If you are current on your payments, you can generally reaffirm the debt and keep making the car payments.  However, unless you have some equity in the vehicle, you might be better off surrendering it and paying cash for a clunker - then saving until you can pay cash for a better rig.  It's best to make your "car payment" to your savings account.

Kathryn Tokarska · Answer

Provided you can afford to make the payments and your equity, assuming there is any, in the car fits into one or more of 3 possible exemptions (depending on other facts) you can continue to pay & keep.  There may be options such as: redemption, reaffirmation and surrender.  Which one makes sense will depend on other facts not disclosed.  Please don't rely on answers here in making a decision whether to file for bankruptcy.  Even with the information you provided there are other considerations such as income & living expenses, perhaps there are some other assets you haven't even thought as assets, how much in medical debt you have & whether there may be a way to settle the medical debt outside of bankruptcy, etc.  and other things to think about in figuring out whether filing bankruptcy makes sense for you and what results you can expect.

Dorothy Bunce · Answer

Questions about keeping a car are the most common concerns that people have when considering bankruptcy.  Cars that are financed are seldom at risk of being taken away by the bankruptcy process (unless the equity in the vehicle is very large), but the car can be repoed by the finance company if you don't make the payment and if you don't reaffirm the vehicle loan.  In Nevada, your vehicle would need to have equity of more then $15K to be at risk.

Diane Drain · Answer

It depends on the exemptions in the state where you live, assuming you live in a state where they allow you to use the state exemptions.  Please understand that bankruptcy is a very complicated process.  It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step.

Michael O'Leary · Answer

The fate of your vehicle would depend upon the amount of equity that you have in the vehicle.  You do not indicate the car's value, so I cannot do the math for you, but in a great many instances a New York resident can exempt up to $16,000.00 equity in a vehicle, due to the generous federal wildcard exemption.  You should contact experienced bankruptcy counsel to discuss this matter.

Robert Sisson · Answer

As long as your current on the payments, you should be able to reaffirm on it.

Susan Taylor · Answer

Just keep paying for it.

William Carter · Answer

Typically you can retain a vehicle when filing a chapter 7 bankruptcy.  You will be obligated to continue making your car payments even after filing the bankruptcy if you want to retain your car.  As a word of caution, you do not get the choice of including or excluding something from your bankruptcy.  You must divulge all of your assets and debts to the court when filing for bankruptcy protection.

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Is there any possible way to keep a car when filing a chapter 7?

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