If you need to file for bankruptcy, one of the questions you may have is whether you will keep your vehicle. In some cases, the answer is yes.
There are a few different ways that you may keep your vehicle as you go through bankruptcy. Make sure that doing so is within your budget and that it’s realistic to keep paying on a loan if you have one.
Keeping your car loan
The document that you should be looking for if you have an auto loan is called a reaffirmation agreement. You enter into this agreement with your car lender to state that you will repay the loan that you currently have on the vehicle. The loan will not be a part of your bankruptcy if you do this.
No loan? Use your exemptions
If you don’t have a loan and instead own your vehicle outright, you have options as well. To start with, you may be able to keep your vehicle if you have enough exemptions for its overall value. Wildcard exemptions, as well as auto exemptions, may be used in combination to protect your asset.
Filing a motion to redeem
A third option is to file a motion to redeem. This allows you to pay off the value of your vehicle at the time of your bankruptcy in a lump sum rather than paying what’s left on the loan. You will need to qualify for this redemption by showing that this is used for personal, family and household use.
These are a few ways to keep your automobile if you go into bankruptcy. One of these may be the right solution for you.