What to do if I filed for Chapter 7 but would like to keep my car?

UPDATED: Mar 14, 2013

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Mar 14, 2013Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

What to do if I filed for Chapter 7 but would like to keep my car?

I owe $7100 and it is only worth $5100. If I have faithfully been making payments and want to continue keeping the car, how do I go about doing that? I could not file it under exemptions because it did not qualify. I am pro se.

Asked on March 14, 2013 under Bankruptcy Law, Idaho


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Usually the answer is yes but there are many factors that affect whether or not a person can keep their car. For example, how much the car is worth, how much is owed on the loan and how far behind they are on the payments?

Basically, in such a situation you have 3 options:

  1. You can “surrender’ (i.e. give back) your car and just walk away;
  2. You can “redeem” the car. This is the process of buying your car back from the lender for the fair market value (i.e. for what the vehicle is really worth as opposed to what you owe). However, redemption requires a lump sum payment; or
  3. You can “reaffirm” the loan. This means that the bankruptcy will not discharge (i.e. wipe-out the loan). You would still owe that money and if you failed to pay as agreed the lender could then sue you. Additionally, in order to reaffirm your loan, you will need to be current with your payments and be able show that you can make the payments.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption