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Can I keep my car loan if I file for bankruptcy?
My finances are strained, especially since I’m recently divorced. I've been talking to my lawyer, and he's recommended I file for bankruptcy, specifically chapter 7. I’m concerned about my car as I bought a gently used Tesla and still have a loan on it. Can I keep my car loan if I file for bankruptcy?
Lauren Smith · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear about your divorce and
bankruptcy
. Chapter 7 is a relatively short bankruptcy generally lasting between three and six months. With it, you sell your assets to pay off your debts. If you haven’t fallen behind on your payments for your Tesla, then you will be in a better place to keep it. You can ask for reaffirmation of your
car loan
. When filing for reaffirmation, you agree to maintain specific debts. You will need to make an official statement with the courts and enter into a new contract with your lender. The other option that will let you keep the car is redemption if you can afford it. In this case, you would pay off the current value of the car to maintain ownership of it. You can find out the current value of your car using
Kelly Blue Book
to decide whether you can afford to pay off the loan. If you’d like to move forward with either of these options, be sure to speak with your lawyer to determine what’s right for you.
To help offset your car expenses and save money, try using the
Jerry
app. Jerry compares 50+ top providers to ensure you’re getting the best rate and coverage. On average, our users save $879 a year!View full answer
- Gregory R.
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