Can I keep my car in a Chapter 7 if it has a title loan on it?

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Can I keep my car in a Chapter 7 if it has a title loan on it?

I purchased a used vehicle in full for $5800 about 6 months ago and got a title loan approximately 3 months ago when I fell on hard times. If I file Chapter 7, must I return the vehicle to the title loan lender? If I file Chapter 13, does the loan payment amount remain the same or is it loan balance spread over the 5 year term?

Asked on February 8, 2012 under Bankruptcy Law, California


Mark J. Markus / Mark J. Markus, Law Offices of

Answered 11 years ago | Contributor

As long as you make the required payments on the Title Loan, you should be able to keep the vehicle in any Chapter of bankruptcy.  In a Chapter 7 you are technically required to enter into a reaffirmation agreement on the loan, but that is not always the optimal choice.  Your attorney can advise you further on that.

As for the Chapter 13 you should be able to spread out the payments on the loan over 5 years, although it may depend on the value of the vehicle and how old the loan is.

Mark J. Markus, Attorney at Law

Handling exclusively bankruptcy law cases in California since 1991.

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