You might be able to save it one of two ways:
- Redeem the car. Pay the market value of the car to the lender in one lump sum.
- Reaffirm the car loan. Sign a new loan that will remain in force after the bankruptcy is over and make up the payments in the new agreement.
What Cannot be discharged by filing bankruptcy?
Debts Never Discharged in Bankruptcy Alimony and child support. Certain unpaid taxes, such as tax liens. Debts for death or personal injury caused by the debtor’s operation of a motor vehicle while intoxicated from alcohol or impaired by other substances. Debts that you failed to list in your bankruptcy filing.
Do I lose my house in bankruptcy?
After filing for Chapter 7, your property will go into a bankruptcy estate held by the Chapter 7 bankruptcy trustee appointed to your case. However, you don’t lose everything because you can remove (exempt) property reasonably necessary to maintain a home and employment.
What happens to my car when I file bankruptcy?
If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments. And if the market value of a vehicle you own outright is less than the exemption amount, you’re in the clear.
Can a bankruptcy trustee take a car in Your Name?
Just because the car is in your name does not automatically mean it will be taken by the bankruptcy trustee. If a court determines that the car is “equitably owned” by your daughter, she will be able to keep the car, even though you are the one with legal title to the car.
Can you exempt a car from Chapter 7 bankruptcy?
If you have unprotected equity, the trustee can sell your car, give you your exemption amount, and distribute the remaining amount to your creditors. Example 1. Joseph owns a Toyota Corolla worth $7,000. He still owes $5,000 on his car note. His state allows debtors to exempt up to $5,000 in equity.
Where can I find the value of my car if I file bankruptcy?
You can find values on websites such as Kelley Blue Book the National Auto Dealers Association. Your bankruptcy trustee will likely favor one of the two websites and expect you to provide a printout from that site as proof of your vehicle’s value.
