Can I Keep My Car In Bankruptcy?

Can I Keep My Car In Bankruptcy?

Cars can be kept in all forms of bankruptcy, but it takes careful planning and legal advice to accomplish this. If your car is already repossessed, then we can get it back, but we must act quickly. In most cases, there is a strict ten-day deadline to file a bankruptcy: after that, you may not be able to regain your car.

If you still have possession of your car, then we can sometimes use the benefits of a Chapter 13 bankruptcy to lower your monthly payments. We do this through three ways: First, in certain cases we are able to lower your debt from the higher balance owed down to the lower fair market value of the car. This so-called “cram down” is a huge benefit of Chapter 13 bankruptcy. Secondly, we can lower your interest rate. And finally, we can stretch your remaining payments over a longer term to further reduce the monthly cost to you. Chapter 13 cases are complex and always require careful legal advice before and during the case.

In a Chapter 7 case, you can keep the car, but you must continue to make car payments. The main advantage here is the if you choose to walk away from the car, either now or at any time in the future, you may do so, without the fear of a large deficiency or a subsequent collection lawsuit.

Cars and bankruptcies are complex. At the Slomka Law Firm we can help you make the right choices for your unique situation.