Can we keep our cars if we file bankruptcy? 21 Answers as of January 06, 2011

We are planning to file for a bankruptcy. We would like to know if we are able to keep our 2 cars. 07' PT Cruiser 3 years left to pay and 08 mustang 4 years left to pay. We can make still make payments for the car. Thanks!

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George Hoselton Bankruptcy Attorney
George Hoselton Bankruptcy Attorney | George Hoselton
A chapter 7 bankruptcy allows you to keep vehicles, but there are limits to the amount of equity you can have in each vehicle. These limits also known as exemptions vary from state to state.


A chapter 13 also allows you to keep vehicles and the exemptions are deducted from any equity in the vehicles, reducing how much has to be paid to the trustee. Payments for the vehicles should be within your budget. There is no guarantee that a judge or your attorney will sign off on a reaffirmation if the payments for the vehicles are not within your budget. You should contact an attorney in your state to confirm whether or not you can keep your vehicles.
Answer Applies to: Oregon
Replied: 1/6/2011
Stuart Jon Bierman  Attorney at Law
Stuart Jon Bierman Attorney at Law | Stuart Jon Bierman
Yes, in New Jersey usually a person can keep his or her car(s) as long as they keep on making the monthly payments and maintain insurance on the car, etc, pursuant to the lease or loan contract.
Answer Applies to: New Jersey
Replied: 1/4/2011
The Law Office of Mark J. Markus
The Law Office of Mark J. Markus | Mark Markus
Yes, you can keep them assuming that are able to exempt any equity in the vehicles. Exemption laws are determined by the state where you lived for the 2 years prior to filing your bankruptcy case.

You will also need to "reaffirm" the debts on the vehicles in your bankruptcy case. Your attorney can explain the process of reaffirmation to you.
Answer Applies to: California
Replied: 1/3/2011
Law Offices of Juan Dotson
Law Offices of Juan Dotson | Juan Dotson
Generally, yes you can keep your cars if you file bankruptcy only if you can keep the payments current. You should consult with an attorney because there are many instances where the trustee will object to keeping a car with over 3 years of payments remaining (over the expense of unsecured creditors who may not get anything if you file bankruptcy).
Answer Applies to: California
Replied: 1/3/2011
DiTocco Law Group, PLLC
DiTocco Law Group, PLLC | Tony DiTocco
It depends what state you are in. In Florida for instance, you each (I assume the other person is your spouse) have 3 exemptions you can possibly apply to save your vehicles:

Auto Exemption - you each get to keep $1000 of vehicle equity (car value less loan balance)

Personal property Exemption - you each get to keep $1000 of personal property (which you could theoretically apply toward the cars)

Homestead - you are entitled to an automatic exemption of your homestead (if you have one). If you do not have one or choose not to use your exemption, you are each entitled to an additional $4000 exemption, which you can also theoretically apply toward the cars.

The foregoing should not be relied on as legal advice, as individual circumstances differ. You should seek the advice of an attorney regarding your specific situation.
Answer Applies to: Florida
Replied: 1/3/2011
    Steven D. Keist, Attorney at Law
    Steven D. Keist, Attorney at Law | Steven D. Keist
    Yes as long as you are current and their values are under the $10,000 state exemption.
    Answer Applies to: Arizona
    Replied: 1/3/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Yes you can keep cars. You should see a lawyer to make sure this happens. Do not hire a lawyer that charges "extra" for reaffirmation agreements.
    Answer Applies to: California
    Replied: 1/3/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    Generally, yes, you can keep your cars in bankruptcy, so long as you continue to pay and reaffirm the debt.
    Answer Applies to: California
    Replied: 1/3/2011
    Mankus & Marchan, LTD
    Mankus & Marchan, LTD | Tony Mankus
    If you file Chapter 7 bankruptcy and there is no equity in the cars (you owe more than they are worth), you can keep the cars. If there is equity, you are generally allowed an exemption for at least one car. In Illinois it is $2,400.00. (Check for the exemption amount in your State.) If there is substantial equity in the car(s), you may have to file Chapter 13 bankruptcy if you want to keep them. As always, you should consult with a bankruptcy attorney as there are other issues to consider.
    Answer Applies to: Illinois
    Replied: 1/3/2011
    Law Office of Raymond J. Dague, PLLC
    Law Office of Raymond J. Dague, PLLC | Raymond J. Dague
    In New York you get to keep $2400 of equity in a car, one for the husband and one for the wife in a joint bankruptcy. In most all cases, because there is usually little equity in automobiles, the person filing bankruptcy gets to keep the cars.
    Answer Applies to: New York
    Replied: 1/3/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    Probably yes, but the answer might depend on what state you are in. Also if the Mustang is financed by Ford credit there's one more thing you need to watch out for.
    Answer Applies to: Virginia
    Replied: 1/3/2011
    Law Offices of Geoffrey Nwosu
    Law Offices of Geoffrey Nwosu | Geoffrey Nwosu
    Yes, you can keep your car if you file bankruptcy. In chapter 7 bankruptcy, you can re- affirm your car loan and continue making payment on the car. For chapter 13, you can include you cars in your payment plan. In some states, You only make one payment to the bankruptcy trustee who then distributes the payment to the creditors.

    Our advise is that you schedule an appointment with a bankruptcy attorney near you that can review your particular financial situation and advise you properly.
    Answer Applies to: California
    Replied: 1/2/2011
    Christopher Legal Group
    Christopher Legal Group | Shawn Christopher
    The short answer is probably yes. Each person filing for bankruptcy typically has an exemption to use for an automobile, meaning that each filer can keep a vehicle provided that there is not too much equity in each vehicle. The exemption amount varies by state, but in Nevada, that amount is $15,000.00 per vehicle. Keep in mind that you may have to sign Reaffirmation Agreements for the vehicles if you file for Chapter 7. These agreements would mean the debt would not be discharged in your bankruptcy. Thus, if you are not able to keep making the payments after the Bankruptcy, if you sign a Reaffirmation Agreement, then the lender can pursue you for the debt and the new late payments (and maybe repossession) would appear on your credit report. If you file for Chapter 13, you can retain the vehicles and you may even be able to lower the payments and reduce the amount of the loan in certain situations. Also, you could surrender the vehicles if you do not want to keep them.
    Answer Applies to: Nevada
    Replied: 1/2/2011
    The Law Offices of Robert L. Driessen
    The Law Offices of Robert L. Driessen | Robert L. Driessen
    This is a situation you will really need to sit down with an attorney to discuss your options. I would meet with a local bankruptcy attorney to assist you.
    Answer Applies to: California
    Replied: 1/2/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Most likely yes. You will, of course, have to continue your payments to the bank on both car loans. The car loans are secured debts. Only unsecured debts are dischargeable (with exceptions). If you do not pay the bank it can reposses the cars 30 days after the meeting of creditors unless the bank gets permission from the bankruptcy court to do it sooner. You might have to reaffirm the car loans although that is something that should be carefully considered since you will be liable for any deficiency should you later have the cars repossessed. Of course if you have other vehicles without loans you will have to justify to the trustee keeping cars with loans instead of surrendering them, particularly if you have no equity in the cars.
    Answer Applies to: California
    Replied: 1/2/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    When you file for bankruptcy protection, you can generally keep your cars, especially if you still owe on them and they are not extravagant. In chapter 7 you have to reaffirm the debts secured by them and in chapter 13, you have to continue making payments on them and you may be able to make lower payments. You should consult an experienced attorney to get a complete evaluation of your specific situation.
    Answer Applies to: California
    Replied: 1/2/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Yes you can keep cars as necessitiesand file for bankruptcy. Simply keep up with your payments and file a reaffirmation (after filing bankruptcy) if the lender requires it.
    Answer Applies to: California
    Replied: 1/2/2011
    DiManna Law Office, LLC.
    DiManna Law Office, LLC. | Dawn DiManna
    You each have one exemption in NH each for a car up to a certain limit of equity. If you still have a loan it is unlikely you have any equity and as long as you still can make the payments then you should be able to keep both cars.
    Answer Applies to: New Hampshire
    Replied: 1/2/2011
    Law Offices of Lady Justice
    Law Offices of Lady Justice | Mona Patel
    Yes of course you can! It is called a reaffirmation agreement. You can keep both cars.
    Answer Applies to: California
    Replied: 1/2/2011
    Naziri Hanassab LLP
    Naziri Hanassab LLP | Vahid Naziri
    Yes you can by either reaffirming or by the concept of "retain and pay."
    Answer Applies to: California
    Replied: 1/2/2011
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    Yes, you can keep your cars if you file bankruptcy.
    Answer Applies to: California
    Replied: 1/2/2011
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