Should I Keep My Car if I File for Bankruptcy
I am filing bankruptcy. I bought a used car four months ago and I owe a lot more money than I could get by selling it. Should I keep the car anyway, because it will be hard to get a loan after bankruptcy, or should I let the lender repossess the car?
Re: Should I Keep My Car if I File for Bankruptcy
Your options are:
1. Reaffirm the loan and make your payments. That will allow you to keep the car.
2. Don't reaffirm the loan and keep making your payments. As long as the money arrives on time, odds are the lender will take no action on the loan.
3. Don't reaffirm your loan and stop making payments. If the value of the car is low, sometimes a lender won't repossess and, although you won't have clear title to the car unless you later settle the debt with the lender in exchange for their release of lien or pay off the debt, you can keep driving it. Other times, the lender will promptly repossess.
Your bankruptcy lawyer may have some ideas as to what the lender may do, based upon the identity of the lender and value of the car. The rest, however, is a matter of personal choice, not really a legal question.