What Will Happen to My Car If I File for Bankruptcy?

San Antonio Bankruptcy Lawyer Helping You Through a New Beginning

If you file for bankruptcy, there is a very good chance you will be able to keep your car, especially if you are current on your payments. Even if you are behind, however, an experienced attorney can help you find a solution that prevents you from having to give up your car while seeking a fresh financial start.

Bankruptcy and Keeping Your Car

To most people, a car is more than just an asset. It is an invaluable tool and a primary mode of transportation. Without a vehicle, it may be nearly impossible to get to and from work and to provide for your family.

As an asset, your vehicle must be listed with all of your other assets when you begin your bankruptcy case. The law, however, allows you to protect certain assets that afford you the ability to earn a living and maintain your household.

Chapter 7 Bankruptcy

When you file for bankruptcy, all efforts by lenders for repossessing your car must be halted for the duration of the proceedings. If you file a Chapter 7, you will most likely be allowed to keep your vehicle by reaffirming your agreement with your lender and continuing to make regular payments. Depending on the value and the amount of equity in your car, however, your settlement may require your car to be sold to repay unsecured debts, even if you own your vehicle free and clear. Our attorneys can help you analyze your situation before making any decisions.

Chapter 13 Bankruptcy

When you file a Chapter 13 bankruptcy, you will probably be allowed to keep your car as well. How your payments will be made depends on how recently you purchased your vehicle and its current value. If you bought the car within 910 days from the filing of your petition, your Chapter 13 plan can incorporate the remaining balance on your auto loan. If you bought the care more than 910 days from the date of filing, the current value of the car could be treated as secured debt while any balance owed above the car's value would be paid as unsecured debt. When your Chapter 13 plan is completed, you will then own your vehicle free and clear.

Call 210-342-3400 Today

If you have additional questions about protecting your vehicle while filing for bankruptcy, contact the Law Offices of Chance M. McGhee. Call 210-342-3400 for a free consultation today.