“If I File For Bankruptcy, Can I Keep My Car?”
To determine if Chapter 7 is right for your situation, your attorney will need to review your financial information and your situation.
Chapter 7 is the most common form of bankruptcy. Individuals who are unable to pay their bills and need a fresh start can benefit from Chapter 7. In most cases, you do not have to go to court. However, you may be required to attend a short hearing, where your petition will be reviewed and you may be asked a series of questions. Depending on your situation, most Chapter 7 cases take about four months from start to finish. In most cases, you can keep your personal property, including your car. In many instances, debtors can even keep their homes.
Depending on how behind in payments you are and for what reason, Bankruptcy may not be your best or only option for avoiding your car from being repossessed.
First, contact your lender. Some people try to avoid the calls and speaking to them, but you may be making it more difficult for yourself. The lender wants you to remain a customer and will discuss what options you have so you continue paying on the loan. They will ask a question regarding the details of your financial situation, in order to know best how to help you.
They may review your payment history, and reasons you cannot pay, and when you may be able to make a payment which could stop the collection process and protect your credit. They might offer to refinance your loan or spread out over a longer period of time—lowering your monthly payment will ease your financial crunch.
Another option is to sell the car, pay off the loan, and then purchase a more affordable car. This may work in some cases, but not others if there happens to be little or no equity in the car. Bottom line, financial hardships happen. Take the necessary steps to find out what your options are and choose the one best for you.