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A common question asked during free consultations is, "Can I Keep My Vehicle If I File Bankruptcy?" The short answer is usually yes. Rarely will anyone have to give up a vehicle if they file bankruptcy. The long answer is it depends upon the value of your vehicle, how much is owed and if you can afford to make the payment each month if the vehicle is financed. All of our consultations are free and with experienced attorneys, Ryan C. Wood or Kitty J. Lin.
What If My Vehicle Is Paid in Full?
In most cases if the vehicle is paid in full the vehicle is older and not worth a lot of money. The California bankruptcy exemptions provide a Vehicle exemption totaling $3,525 to protect vehicles. Any unused portion of the Wildcard exemption totaling $23,250 can be used to protect your vehicles also. Between these two exemptions your vehicles should be exempted from the bankruptcy estate and protected. Most vehicles with loans are either not worth what is owed or the value of the vehicle is close to what is owed, so there is very little value to protect.
What If I Have A Car Loan and File Chapter 7 Bankruptcy?
Generally, if you have a loan on your vehicle and make the payment each month there should be no reason why you cannot keep the vehicle. If you need to file a Chapter 7 bankruptcy case you can either redeem the vehicle, reaffirm the debt or surrender the vehicle. Most car loan companies will allow you to just continue to make the normal monthly payment after the bankruptcy case is filed. If you do not reaffirm the debt the car loan company may not send you statements, allow online bill payment or report to the credit bureaus of your regular on-time payments.
What If I Have A Car Loan and File Chapter 13 Bankruptcy?
If you are behind on your monthly payments and are having trouble making the payment each month, Chapter 13 bankruptcy can make the payment more affordable by restructuring the debt in the Chapter 13 Plan. Filing a Chapter 13 can even reduce the amount owed on the vehicle and lower the interest rate. To pay less for the vehicle it must have been purchased 910 days prior to the filing of the bankruptcy case. In some jurisdictions you are able to keep making your loan payment directly to the lender. In other jurisdictions the vehicle loan payment must be included in the Chapter 13 Plan.
We are bankruptcy lawyers in Oakland with offices in Redwood City, San Francisco, San Jose, Fremont, and Oakland. We also represent clients throughout the Bay Area including Oakland, San Mateo County, Santa Clara County, Alameda County, Contra Costa County, Burlingame, Daly City, Foster City, Half Moon Bay, Millbrae, Pacifica, Redwood City, San Bruno, San Mateo, South San Francisco, Cupertino, Los Gatos, Milpitas, bankruptcy lawyers in Mountain View, Palo Alto, Santa Clara, Sunnyvale, Martinez, Pittsburg, Richmond, San Pablo, San Ramon, Walnut Creek, Berkeley, Dublin, Hayward, Livermore, Pleasanton, San Leandro and Union City.
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