When filing for Chapter 7 bankruptcy, there is a common misconception that you will automatically lose your car. However, this is not necessarily the case. In fact, in many situations, individuals are able to keep their cars by utilizing exemptions provided under bankruptcy laws. These exemptions allow you to protect certain assets, including your vehicle, up to a certain value.
In Chapter 7 bankruptcy, the equity you have in your car plays a crucial role in determining whether you can retain ownership. If the equity in your car falls within the allowable exemption limit, you can usually keep your vehicle. Additionally, if you are still making regular payments on your car loan and are current on those payments, you may be able to reaffirm the loan, which allows you to keep the car and continue with the loan payments. It's essential to consult with a bankruptcy attorney who can guide you through the process and help you understand the specific laws and exemptions applicable in your jurisdiction to ensure you can retain your car while still benefiting from the debt relief provided by Chapter 7 bankruptcy.
