Can I keep my new car if I continue paying for it after filing for bankruptcy? 19 Answers as of June 27, 2013

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Law Office of Susan G. Taylor
Law Office of Susan G. Taylor | Susan G. Taylor
Yes.
Answer Applies to: Texas
Replied: 5/21/2013
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
Yes! As long as you can afford the car payments you should be able to keep it. There are several things that you must know regarding the secured debt on your car. Since car loans are secured (e.g. the car loan lender has a lien on the title or pink slip), the lender may require you to sign and file with the bankruptcy court a "reaffirmation agreement". A reaffirmation agreement is a document that will be prepared by your car loan lender that lays out the value of the car, the payment amount, how much is still owed, the original loan amount, interest rate information and that you can afford the car payment. The reaffirmation must contain a section that lays out your bankruptcy schedule I information (income) and your schedule J information (expenses). For the reaffirmation agreement to be accepted you must have indicated in your bankruptcy schedules that you have the income to make the payment along with all of your other expenses such as rent, food, etc. Many bankruptcy judges are against you signing reaffirmation agreements for cars as this can cause you financial problems down the road. If you have an attorney and you can get him or her to sign the reaffirmation agreement with you and your bankruptcy schedules show that you can afford to make the payments, the reaffirmation agreement will normally go right through after filing. If you are not represented by an attorney then you will be forced to go to court and convince the Judge that you can afford the car payment. What many people do is to simply continue to make the monthly payments on time and do not sign a reaffirmation agreement. This is possible as long as your lender is ok with it. The law is that if you do not sign and properly file a reaffirmation agreement and just continue to make payments on the car, (we call this "pay and drive"), your car can be repossessed even though you are current on the monthly payments. You must know that rarely does a lender do this if you maintain the payments. The major reason why lenders want you to sign a reaffirmation agreement is so that you will again become personally responsible for the full amount of the loan on the car. As an example of this, lets say 1 year after bankruptcy you lose your job or find yourself in financial trouble. If you have NOT reaffirmed the car loan then you can simply return the vehicle to the lender and you will owe no additional money. If you HAVE reaffirmed the debt and the vehicle is repossessed then you are liable for the full amount of the loan.
Answer Applies to: California
Replied: 10/4/2012
Law Office of Andrew Kern
Law Office of Andrew Kern | Andrew Kern
It depends. Some creditors require you to file a "reaffirmation agreement" in order for you to retain your car and other creditors do not require the agreement. Check with the creditor.
Answer Applies to: California
Replied: 10/3/2012
Wild Sky Law Group, PLLC
Wild Sky Law Group, PLLC | Roxanne Eberle
In most cases, yes.
Answer Applies to: Washington
Replied: 6/27/2013
Lynn Boak, Attorney at Law P.C.
Lynn Boak, Attorney at Law P.C. | Ethelyn (Lynn) Boak
If you reaffirm it you may be able to keep it, but it will depend on what other debts you have. The trustee may frown on it if it is a luxury car and very expensive.
Answer Applies to: Wyoming
Replied: 10/3/2012
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    Usually yes, although some vehicle lenders require you to enter into a reaffirmation agreement in order to do so. That is a contractual obligation to repay the debt notwithstanding the bankruptcy discharge. Otherwise, as long as you have sufficient exemptions under applicable law to protect the equity in your vehicle (in a Chapter 7 context), you should be able to keep it.
    Answer Applies to: California
    Replied: 10/3/2012
    Law Office of Jeffrey Solomon
    Law Office of Jeffrey Solomon | Jeffrey Solomon
    As between you and the car lender, you might have to sign a reaffirmation agreement to be able to keep the car. If there is too much equity in the car, the chapter 7 trustee can take your vehicle, or you would have to pay money to the trustee to keep your car.
    Answer Applies to: Florida
    Replied: 10/3/2012
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Yes, and you must sign a reafformation agreement or have one denied by the court.
    Answer Applies to: California
    Replied: 10/3/2012
    The Smalley Law Firm, LLC | Cary Smalley
    Yes, you should be able to keep your car as long as you continue to make the payments.
    Answer Applies to: Kansas
    Replied: 10/3/2012
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    Yes, you should be able to keep the car by filing a Reaffirmation Agreement with the Lender.
    Answer Applies to: New Jersey
    Replied: 10/3/2012
    R. Jason de Groot, P.A
    R. Jason de Groot, P.A | R. Jason de Groot
    You can probably keep your car if you continue making all the payments.
    Answer Applies to: Florida
    Replied: 10/3/2012
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