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Bankruptcy in Brief

             a service of the Moran Law Group
 

Can I keep my car? 

Yes.  What you must do to keep the car through a Chapter 7 varies depending on whether there is non exempt equity in the car.

Will the trustee take the car?

If there is no equity in the car, after subtracting any car loan and exemption from the car's present sale value, the bankruptcy trustee will not take the car. 

If there is equity in the car over and above the value of the exemptions available, a debtor can usually buy any unprotected equity from the Chapter 7 trustee. 

Will the creditor take the car?

If you still owe money on the car, you can choose to reaffirm the debt to the secured lender, keep the car, and continue paying under the existing terms; or you can buy the car from the secured creditor in a single payment for its present value (redemption). With some lenders, you don't even have to reaffirm the debt:  you can keep the car if you continue to make the payments called for in the contract. 

If you choose, you can surrender the car and be free of any obligation to pay for it.  After all, bankruptcy is a chance for a fresh start, and perhaps that includes freedom from a lemon or a gas guzzler.

 More on choices about secured debt.Lien Stripping in Chapter 13 | Recently purchased cars after BAPCPA

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