Q: I just bought a new car at the beginning of this year and I am current on my payments, if I file will I lose my car?
I need my car it is very important to me to keep it. But I cant afford the debt I have incurred through credit card debt. My main purpose is to get rid of my credit card debt but keep my car. Do I have to put that in when I file? I dont own a home I rent an apartment. So the only thing I need to file is my credit card debt. If I have to put in that I have a car loan I will I just dont want to get it taken away from me.
A: There are a couple of options for keeping a car with an outstanding lien in Chapter 7 bankruptcy. One is to reaffirm the debt (basically, agree that the debt won't be affected by the bankruptcy and that you'll keep making payments as scheduled). Another is to "redeem" the car by paying the full market value (not the amount of outstanding debt). Your options may be limited by the amount of equity in the vehicle, but Texas has flexible exemptions that may be used to protect the equity in your vehicle.
A local bankruptcy attorney can assess your debts and other assets and help you choose the best approach.
*Kevin Chern is Managing Partner of UpRight Law, a national law firm with licensed attorneys providing bankruptcy and consumer legal services in all 50 states. He is an Illinois licensed attorney with 21 years of federal consumer bankruptcy and consumer protection law experience. This response is for informational purposes only and is not intended to be legal advice. For legal advice, consult an attorney licensed in your state with the appropriate expertise.
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