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Can I keep my car if I file for bankruptcy?

“I need my car for work.  Will the bankruptcy trustee/court take my car from me?”

This is a very common question I am asked.  The short answer is yes!  (I have never had a client have their automobile taken from them because they filed for bankruptcy).

The analysis begins by determining whether your automobile has a lien (loan) on it or if it has been paid in full.

If you owe more money on your car than what it is worth then, by  definition, it is “upside down” and has no equity.  Therefore, the bankruptcy won’t or cannot sell your car because there is no benefit to do so.

If your car is paid in full then you will likely be able to use an exemption or exemptions to protect the car from being sold by the trustee.  Or, if there is equity beyond what is still owed on the car then you may use exemptions to protect that equity.  In both of these instances, however, it is important for us to discuss your options which we will do in your initial FREE CONSULTATION.

“Can the lender take my car even if I am current on my payments?”

Short answer here is no.  If you owe money on your car, and want to keep it, simply continue to keep making your required payments.

Often is the case that your bank will tell you that you MUST sign a Reaffirmation agreement (BEWARE).  As you can imagine, South Carolina has laws regarding reaffirmation agreements.  It is rarely in your best interest to sign one. Likewise, they are very rarely granted by the court.

What other options do I have with my automobile(s)?

Some of my clients, no matter the reason, no longer want to keep their vehicle(s).  If this is you, you can choose to “surrender” the vehicle and be free from the obligation to pay for it.  In turn, you can purchase a different vehicle that suits your particular needs.

Lastly, you could “Redeem” the automobile.  It requires you to pay in one lump payment the present fair market value of the car.  Rarely is the case where this is a viable option.  However, like all of the above, it is something we can discuss during your FREE CONSULTATION.