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How can I file bankruptcy on a car loan?
If I file for bankruptcy on my car loan, will I still be able to keep the car? I’m having a lot of financial problems right now and this would help me.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
While you can file for bankruptcy on a car loan, you generally won’t be able to keep the car in the process. In most car loans, your car is the collateral for the loan, meaning it has
a lien
until you pay off the loan. When you declare bankruptcy on your loan, you forfeit your debt to the lender, but you also forfeit your rights to the car. However, there are still a couple of options available to you:If your payment on the loan is current and you can continue to make payments in the future, check to see if you qualify for Chapter Seven bankruptcy. Your car might be exempt from repossession, depending on where you live.
If you’re behind on your payments but you can spread out and pay off the balance over three to five years, you might consider filing for Chapter 13 bankruptcy. This will allow you to keep the car while making monthly payments.
You can also try
refinancing your loan
for better terms if you’re confident that you could make smaller payments each month.In the meantime, it’s a good idea to cut back on other bills to save up for your loan payments. The
Jerry
app can help you find the cheapest car insurance available in a matter of minutes by collecting quotes from over 50 top providers, including Nationwide and Travelers. Just answer a couple of questions and Jerry will do the rest of the work for you. View full answer
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