Chapter 7 bankruptcy
If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments.

Can I keep my assets in a Chapter 13?

You can keep your property in Chapter 13 bankruptcy, but you’ll have to keep up with secured debt payments and catch up on secured debt arrears. If you want to keep nonexempt property, such as a boat, baseball card collection, or another luxury item, you’ll have to pay for it through your Chapter 13 plan.

What happens to your car when you file Chapter 13 bankruptcy?

When you file for Chapter 13 bankruptcy, you propose a plan to pay back some or all of your debts over a three to five year period. A bankruptcy normally discharges your personal liability on a car loan but does not wipe out the lender’s lien on the vehicle.

Can you buy a car in Chapter 7 bankruptcy?

In Chapter 7, you also have the option of purchasing your car outright from your lender at the retail value of the car at the time your bankruptcy is filed. This may be a good option if the value of your car is much lower than the amount of your loan.

How can I protect my car in bankruptcy?

If you own your vehicle free and clear of any liens, then you must be sure to protect your car from the bankruptcy trustee. This requires claiming exemptions on the Schedule C to cover the value of the car. Any value of the car that you do not claim as exempt, the trustee can seek by selling your car, and paying you your share.

Can a car loan be cramdown in Chapter 13?

The cramdown option isn’t limitless. It doesn’t apply to new car loans (and other types of property), and it doesn’t survive a Chapter 13 case that is dismissed rather than discharged. No cramdown for a recent property purchase. Cramdown isn’t available on a loan used to buy a vehicle during the 910 days before filing the bankruptcy case.