I am financing a car, can I file bankruptcy and keep my car?

Yes, in many cases you will be able to keep your car you are financing and file Chapter 7 bankruptcy.  Many times people have a large amount of medical bills, credit card debt, or other unsecured debts that they can eliminate in a Chapter 7 bankruptcy and still keep the car or truck they are financing.

Keeping a car/truck you are financing after your Chapter 7 Bankruptcy would be done through a written “reaffirmation agreement” between you and the creditor financing your car. The reaffirmation agreement would then need to be filing with the Bankruptcy Court while your case is pending.

Generally, to reaffirm and keep your car you are financing after your bankruptcy you must be current on your car payment for several months prior to filing your Chapter 7 bankruptcy and you must have the financial ability to continue to make the payments after deduction your household monthly expenditures. There are other details involved in reaffirming a vehicle so you should discuss your specific situation with a bankruptcy attorney.

On the other hand, some people owe a lot more than their car/truck is worth, or they cannot afford to continue to make the payments after a Chapter 7 bankruptcy and so they may need to surrender their car/truck in the bankruptcy. Surrendering a car/truck that is being financed in a Chapter 7 bankruptcy allows you to walk away not owing any further money to the creditor as long your case receives a discharge.