Vehicles

Many people filing for bankruptcy want to keep their car and they’re in luck, as you can often keep your car in bankruptcy. Find out how. Debts

Can bankruptcy help me get my car back after a repossession?

Filing bankruptcy may allow you to get a car back after it has been repossessed. This article explores how this might work in Chapter 7 vs. Chapter 13 bankruptcy and why it may not always be a good idea to try.

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What is the difference between a co-signer and co-owner of a car?

When completing the bankruptcy forms, nothing needs to be noted other than that there is a secured non-priority debt with “Debtor 1 and at least another.” List the co-signer on Schedule D.

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What happens to the co-signer of a car in bankruptcy?

If you have bought a car and your loan has a co-signer, you may wonder what will happen to the co-signer when you file bankruptcy.

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Can I reaffirm my car in my state?

This is state specific so you will want to check what the rules are where you live. Laws can vary about reaffirmation agreements in a bankruptcy.

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I drive for Uber. Can I keep my car if I file for chapter 7 bankruptcy?

Probably. You are only at risk for losing your car during a Chapter 7 bankruptcy in one of two scenarios.

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I called my car lender to talk about my bankruptcy and they refuse to talk to me. What should I do?

It is not uncommon to have a lender react this way after a bankruptcy filing. When you file a bankruptcy an automatic stay goes into effect, which means that creditors cannot continue in any collection efforts while the bankruptcy is ongoing.

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When should I redeem my car?

"Redeeming" your car means that you buy it from the lender. To do this, you must pay the lender for the fair market value of the car.

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I want to redeem my car. When do I do it?

"Redeeming" your car means that you *__buy it from the lender that you financed it with__*. To do this, you will pay the fair market value of the car, in exchange for the title of the car. The remaining balance owed is discharged.

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When should I surrender my car?

Surrendering your car to the lender is pretty straightforward: you owe money on your car and would like to be excused from paying that money back. Rather than being required to continue paying on the terms of your loan, you can simply give the car back to the lender and call it a day. The balance that you owe on the loan will be wiped away with the rest of your dischargeable debts in bankruptcy.

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Can I keep my car if I file for bankruptcy?

Most Chapter 7 filers are able to keep their cars. You can keep your car if you’re current with your car loan payments (or the car is paid off), and the laws in your state allow you to protect (“exempt”) all of your equity in the vehicle.  

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Can I buy a car before or after I file for bankruptcy?

There is nothing that prohibits debtors from buying a car before filing or after filing. Whether it makes sense to buy now or after filing is a personal decision that depends in part on whether a debtor has good credit now, that will deteriorate after filing or bad credit that will improve after filing.

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I want to surrender my car. When do I do it?

"Surrendering" your car means that you *__give it back to the lender that you financed it with__*. If you surrender your car, any debt that you owe on it will be forgiven when you receive your bankruptcy discharge.

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Do you do car reaffirmations?

You have to decide whether doing a car reaffirmation makes sense financially.  Usually it does not. If you want to do one, Upsolve does populate the bankruptcy form (“Statement of Intention”) for reaffirming.

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What Happens if I'm Not Current on My Car Payments?

If you’re behind on your car payments and don’t have the ability to get current, Chapter 7 bankruptcy probably won’t prevent the creditor from repossessing the car. While your bankruptcy filing will initially stop any repossession, the lender can ask the court to lift the automatic stay. And if you are behind on your payments, most courts will lift the stay to let the lender proceed repossess the car.

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What happens if I owe money on a car I need after bankruptcy?

Bankruptcy gives you some flexibility in how you deal with your car loan. The bankruptcy forms provide you with at least three choices for dealing with your car loan. You can __surrender__ your car to the lender, __redeem__ the car for its value, or __reaffirm__ the car debt. 

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If I surrender my vehicle, will I be responsible for any balance owed?

As long as you are surrendering you: - Are surrendering your vehicle voluntarily and - have indicated that you intent to surrender it on your forms,  *__you will not be responsible for any remaining amounts owed regardless of the car's value.__*

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What should I do if I changed my mind on what to do with my car after bankruptcy?

As long as your bankruptcy has not yet been approved (and you still have your car), you can  amend (change) your Form 108 Statement of Intent to indicate whether you would like to Reaffirm, Redeem, Surrender, or do something else with your car.

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How Do I Reaffirm My Car Loan?

If you decide to reaffirm your car debt in bankruptcy, it's in a seven-step process.

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Do I own my vehicle? What percentage of it do I own?

Whether or not you own your vehicle depends on whether you purchased it using a loan or leased it from a dealer or other agency.

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I already filed and I need to surrender my car. What should I do?

Once you file bankruptcy, the court places an automatic stay on any repossession efforts. The lender with whom your car is financed can ask the court to lift this stay and, if the court grants their request, they will be legally allowed to repossess the car.

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Should I surrender my car in bankruptcy?

In many cases, surrendering your car in bankruptcy can be a great idea, although there are some drawbacks.  Here is a list of pros and cons of surrendering your vehicle after filing. 

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Why doesn't my car appear on my exemptions list?

There are a few reasons that your car(s) might not be listed on your exemptions list.

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How to redeem your car?

Redeeming your car debt in bankruptcy can make sense if the car is worth less than the amount you owe on your car loan. Redemption allows you to pay the lender the value of the car, rather than the larger amount you owe.  

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I bought my car with my deceased grandma as co-signer. Am I the sole owner?

We're not sure. It may depend on your grandmother’s will. If she left her interest in the car to you, you would be a sole owner of the car.

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Should I File For Bankruptcy After A Repo?

Filing for bankruptcy after a car repo can get rid of any remaining debts that you have for your car.

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Should I Reaffirm My Car Loan?

If you're filing for bankruptcy and you have a car loan, reaffirming your car debt may help you keep your car.

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What Happens to My Car Loan After Bankruptcy?

You might be wondering what happens to your car loan after bankruptcy. One popular misconception is that bankruptcy can get rid of your car loan while allowing you to keep your car. This article goes over your options for dealing with a car loan during and after Chapter 7 bankruptcy.

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Upsolve is a 501(c)(3) legal aid nonprofit that started in 2016. Our mission is to help low-income Americans in financial distress get a fresh start through Chapter 7 bankruptcy at no cost. We do this by combining the power of technology with attorneys. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have mission-driven funders that include the U.S. government, former Google CEO Eric Schmidt, and private charities.

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