Bankruptcy and my car. You may be wondering what will happen to your car if you decide to go bankrupt. The ownership of your vehicle will be affected by bankruptcy whether you own it outright, or if you’re paying for it through a finance package.

How long after Chapter 7 can I buy a car?

Though it’s possible to apply for a car loan after your Chapter 7 discharge, that could take awhile: cases generally last a total of about 3 to 5 months from the date of filing to the day your debt is discharged. And once you’ve cleared that hurdle, beware of high interest rates.

What happens to my car when I file 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. And if the market value of a vehicle you own outright is less than the exemption amount, you’re in the clear.

Can you get a car loan after a Chapter 7 bankruptcy?

The benefits of reaffirmation include: You secure your interest rate and payment. After a Chapter 7 bankruptcy, obtaining a car loan isn’t impossible, but your interest rates will be high, and you will likely only be able to obtain financing through a subprime lender. You don’t have to start over again with a new loan term.

Can a trustee sell Joseph’s car in bankruptcy?

The trustee cannot sell Joseph’s car in Chapter 7 bankruptcy because the $5,000 motor vehicle exemption is enough to protect all of his vehicle equity. ($7,000 value – $5,000 car note = $2,000 equity) Example 2. Ella owns a Harley motorcycle worth $15,000 free and clear.

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.