Many people filing for Chapter 7 bankruptcy want to know what will happen to their car. Cars are often important to get to work or school and to take care of other important tasks, like buying food. The good news is that most people filing for Chapter 7 bankruptcy are able to keep a modest car.
Whether you can keep your car in Chapter 7 depends on whether you are behind on your car payments (unlike Chapter 13, Chapter 7 doesn't allow you to make up arrears through the bankruptcy), the amount of your car loan (if any), and any available exemptions you can apply to that loan.
You can also keep your car by using one of the bankruptcy options for handling secured debt -- redeeming the car or reaffirming the loan. Or, if you don't want to keep your car, you can surrender it in the bankruptcy.
If you lease your car, your options are different -- you can continue with the lease by assuming it in the bankruptcy, or you can terminate the lease by rejecting it.
Your Car in Chapter 7 Bankruptcy
Chapter 7 bankruptcy allows you to keep or surrender your car or truck.
If You Are Behind in Your Car Payments, Can Chapter 7 Help?
Chapter 7 bankruptcy itself does not provide a way to catch up on overdue car payments.
What Happens to a Car Lease in Chapter 7 Bankruptcy?
In Chapter 7 bankruptcy, you can assume or reject a car lease. Learn more.
Options to Keep Your Car in Chapter 7 Bankruptcy
If you own a car and file Chapter 7 bankruptcy, what you do with your car will depend on whether you owe money on it and, if you do, whether you can afford to keep it.
Reaffirming a Car Loan in Chapter 7 Bankruptcy
If you have a car loan, you may be able to keep your car in Chapter 7 bankruptcy by reaffirming the loan.
Can I Keep Two Cars in Chapter 7 Bankruptcy?
Whether you can keep two cars in Chapter 7 bankruptcy depends on a number of factors. Learn more here.
The Motor Vehicle Exemption: Can You Keep Your Car in Chapter 7 Bankruptcy?
The motor vehicle exemption helps you keep your car, truck, motorcycle, or van in Chapter 7 bankruptcy by protecting equity in a vehicle.
Car Repossession Laws: An Overview
Learn about car repossessions: how they work, how to avoid them, and your options if it happens to your car.
My car was repossessed. Can Chapter 7 help?
If your car has been repossessed, filing for Chapter 7 bankruptcy may allow you more time to negotiate with your lender and get your car back.
Can the Lender Repossess My Car During Chapter 7 Bankruptcy?
If your car loan lender gets court permission, it can repossess your car during Chapter 7 bankruptcy. But you have options to avoid this.