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Can you file bankruptcy on a car title loan?
I lost my job and I can’t pay my debts, so I’m filing for bankruptcy. I have a car title loan, but I’m not sure if bankruptcy covers it. Can I file for Chapter 7 or Chapter 13 on a car title loan?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Sorry to hear about your job. As far as bankruptcy, Chapter 7 will allow you to discharge unsecured loans while Chapter 13 will restructure them into a payment plan.
However, neither type of bankruptcy will allow you completely discharge a car title loan, as it’s technically considered a secured loan.
Because you’re using your car as collateral, a car title loan is secured. Under bankruptcy law, Chapter 7 will only discharge unsecured loans. However, filing for Chapter 7 and getting your unsecured debts discharged may help you pay for the car title loan.
In Chapter 13 bankruptcy, your debt is restructured under a plan made by the court. Your car title loan would be included in this, which could lower your payments or make them more manageable.
If you’re searching for a way to save some money to pay off your car title loan, review your car insurance policy and search rates with the Jerry app.
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