If you lease or finance a vehicle and file for bankruptcy, you can keep your vehicle as long as you are, and remain, current on your car loan or lease payments. Your car lender can, however, repossess your vehicle if you fall behind on your payments, and bankruptcy won’t stop that.

Can I buy a car if I’m in debt?

Buying a car also adds to your debt load, which can make you appear to be a riskier borrower. That could mean mortgage lenders are less likely to approve you for a mortgage loan. And, if you take on a large debt such as a car loan, you might be less able to afford the payment on the home you really want.

Can You Keep your car in a Chapter 7 bankruptcy?

When you file either a ​ Chapter 7 straight bankruptcy or a Chapter 13 payment plan case, you’ll be able to structure it so that you can keep your vehicle. Your first option in a Chapter 7 case is to enter into a reaffirmation agreement with your car lender.

What happens to my car loan if I file bankruptcy?

Contact your car lender if you wish to pursue a reaffirmation agreement. A reaffirmation agreement must be approved by the bankruptcy court, and they generally won’t approve it if the lender does not reduce the interest rate or principal balance of the loan.

Where can I find the value of my car if I file bankruptcy?

You can find values on websites such as Kelley Blue Book the National Auto Dealers Association. Your bankruptcy trustee will likely favor one of the two websites and expect you to provide a printout from that site as proof of your vehicle’s value.

How can I keep my car if I have a car loan?

If you’re still making payments on a car loan, you haven’t paid for your car yet and he only way to keep the car is to pay for it. One way to do this is through a redemption, where you pay for the car’s current value in a single payment, no matter how much you owe.