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Can I file for bankruptcy if I still have a car loan?
On the advice of my lawyer, I might need to file for bankruptcy, but I still have a car loan. Can I still file for bankruptcy? What happens to my car?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
That’s a tough situation to be in. The good news is, you can still file for bankruptcy even if you have a
car loan
, but what happens afterwards may be more complicatedContrary to some popular beliefs, you don’t get absolved of your car loan, even in Chapter 7 bankruptcy. You still have to pay for the car loan to keep the car, or you can surrender it to the lender via a voluntary repossession.
If you want to keep the car, you’ll have to pay back any amount owed and keep up with current payments. This is often referred to as reinstating the car loan. In some cases, your lender may also work with you to make more affordable monthly payments, so making a call to your lender is well worth the effort.
Remember that you will still need to keep car insurance on the vehicle, so budget for that accordingly. To save some money, hop onto the
Jerry
app. Jerry pulls quotes from up to 50 providers so you can get the most affordable coverage for your car insurance needs.View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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