Can I Keep My Car After Bankruptcy?

Yes. What you must do to keep the car varies depending on whether there is non exempt equity in the car.

Will the trustee take the car?
If there is no equity in the car, after subtracting any car loan and exemption from the car's present value, the bankruptcy trustee will not take the car.

If there is equity in the car over and above the value of the exemptions available, a debtor can usually buy any unprotected equity from the Chapter 7 trustee.

Will the creditor take the car?
If you still owe money on the car, you may reaffirm the debt to the secured lender, keep the car, and continue paying under the existing terms; or you can buy the car from the secured creditor in a single payment for its present value (redemption). Under the new law, you have to reaffirm your car loan within 45 days after the "341 meeting."

If you choose, you can surrender the car and be free of any obligation to pay for it.

We include unlimited re-affirmation agreements with our online bankruptcy software.