Q: Do I make payments on my car during bankruptcy proceedings.
I have a title loan on my car and I filed for chapter 7 in middle court of Florida. I checked that I wanted to keep making payments because I didn’t want to reaffirm or give up my vehicle. My car is exempt. I was wondering if I had to keep making payments during chapter 7 proceedings or would i only have to continue making payments once the court discharges it.
A: The Bankruptcy Code gives a Ch. 7 debtor three choices of how to handle a secured claim- surrender the collateral to the creditor in full satisfaction of the secured claim; redeem, i.e., pay the secured claim in cash, or reaffirm the debt.
Perfected liens against collateral are NOT discharged in bankruptcy, to the extent of the fair market value of the collateral.
if you want to keep the car, you must continue to make timely payments to the secured creditor. You will be fortunate if the creditor permits you to exercise the "fourth option", e.g., keeping the collateral just by continuing monthly payments, without reaffirming or redeeming.
Christopher Crull agrees with this answer
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