You will not lose your car in a Chapter 7 Bankruptcy unless you have substantially more than the exempt amount of equity in your car. If you owe more than what the car is worth then you can keep your car(s) as long as you continue making payments. You may also surrender your car without penalty.

If you have substantially more than $3,000 (or $6,000) in equity then you will want to consider filing a Chapter 13 bankruptcy, where you can keep your car and make minimum payments to the bankruptcy trustee (maybe as low as $50/mo). In a Chapter 13 bankruptcy we can also lower interest rates to around 5% and often lower your car payments. Contact an experienced bankruptcy attorney for more information and other options to help you keep your car or to help you carefully plan out how to purchase a replacement before filing for bankruptcy.

Posted in: Frequently Asked Bankruptcy Questions