If I need to file a Chapter 7 but I want to keep my car and not have my monthly payments change, what can I do?

UPDATED: Sep 5, 2011

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If I need to file a Chapter 7 but I want to keep my car and not have my monthly payments change, what can I do?

I live in WI. I have a joint car loan with my father. If I simply keep making my payments will everything be fine? Will this negatively affect my father’s credit?

Asked on September 5, 2011 under Bankruptcy Law, Wisconsin


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

To keep the car and continue making payments, you will need to reaffirm the debt.  Reaffirming the debt means that you keep the car and continue making payments.  On the bankruptcy forms, you will need to state that you are reaffirming the debt with this particular creditor.  You will also need to indicate on the bankruptcy forms that you father is also on this auto loan.

When you reaffirm a debt, the creditor will usually offer you better terms (reduced monthly payments, etc.).

As long as you continue making the car payments, it should not affect your father's credit; however, it would be advisable to discuss that credit issue with a bankruptcy attorney.  

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