Many people worry that filing bankruptcy means they need to give up their vehicle. That simply is not the case. If you own your vehicle without a loan, you can keep your vehicle in a Chapter 7 so long as you can use the bankruptcy exemptions (property protections) to cover the value of the vehicle. In a Chapter 13 bankruptcy – you will keep your vehicle although having a significant amount of equity in the vehicle may mean you may need to pay more to unsecured creditors.
If you have a vehicle loan and the payment is reasonable and the debt owed does not far outweigh the value, you may want to keep the car in the Chapter 7 bankruptcy. You can do this with a Reaffirmation Agreement between you and the creditor where you keep the car loan out of the bankruptcy discharge and continue to make payments and drive the car just as if the bankruptcy did not happen.
If your current vehicle is not reliable or the payments are too high, or you simply owe too much on the vehicle, you may consider surrendering the vehicle back to the lender and discharging the debt. Washington Debt Free can provide you with information for special finance lenders who may be able to get you into a vehicle loan shortly after filing, with no time without a vehicle. Contact Washington Debt Free to discuss your options with your car today.