If I filed for Chapter 7 bankruptcy will I loose my car?

Question Details:

I am on disability and am drowning in credit card debt.

Asked 11/20/2009 under Bankruptcy | 385 View(s) | More Legal Topics

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Bankruptcy Law Answers

You may or you may not.  In a Chapter 7 a debtor has 3 possible options: 1. Surrender.  You can contact your lender and tell them that you want to "surrender" (turn in) your car.  If your lender sells it for less than the outstanding balance remaining on the loan, then that "deficiency" balance should be eliminated in your bankruptcy 2. Reaffirm.  This means that if you fail to make payments after your bankruptcy is closed, and the lender repossesses the vehicle, you can be sued for the deficiency.  However, you will also have your payments reported on your credit report so re-affirming can help re-establish your credit. 3. Redeem.  A car owner is permitted to reduce the current car balance on their olan to the fair market value with a new loan.  This is what is known as "redemption".  However, you must own the car for at least 910 days before filing bankruptcy to qualify.

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