Q: If I File For Bankruptcy What Happens To My Vehicle, If I Own It Jointly?
A: You can claim an exemption for your equity and reaffirm the loan, if any, to keep the car.
David Luther Woodward agrees with this answer
A:
That depends in part upon which Chapter of bankruptcy you choose to file.
In a Ch. 7, you have the choices of redemption (paying off the secured claim in cash), surrender of the vehicle, or reaffirmation of the debt (assuming the creditor agrees to terms).
You do get an exempted equity value under the Bankruptcy Code of approx. $3K+ (it's adjusted every few years), but that exemption does not impact the balance of any perfected lien on the car.
You do not say whether your co-owner may also file for bankruptcy (which should double your exemption allowance).
In a Ch. 13, if you financed the car more than 2 years and nine months prior to the bankruptcy filing, you can "cram down" the lien amount to the fair market value of the vehicle, and probably reduce the interest rate payable on the crammed down amount through the plan.
In a Ch. 13, a co-debtor stay kicks in the moment you file, so your co-owner, if also obligated on the car loan, is protected by the bankruptcy stay, provided that your plan deals with the car debt.
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