Q: Will Bridgecrest allow retaining and paying car loan in Chap 7?
I am filing for Chapter 7 bankruptcy pro se in Missouri, but will use Kansas exemptions as I lived there for most of the last two years. I've only been in Missouri since June 2024. I have a car loan with Bridgecrest, and I do not want to reaffirm it. Instead, I would like to retain the vehicle and continue making payments. I have not missed any payments on the car, and its current value is $22,700, while the loan balance is $23,272. We plan to reaffirm our home and have around $30K in other debts. Since this is our only vehicle and used for personal purposes, will Bridgecrest allow me to maintain the loan under these conditions?
A: If you’ve been in Missouri since June 2024, you will have to file in Missouri using Missouri or federal exemption. Creditors most always permit you to reaffirm your debt even if there is an arrearage on the debt.
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A:
In Chapter 7 bankruptcy, you generally have the option to retain a vehicle and continue making payments without reaffirming the loan, as long as you can show you can maintain the payments. Since you are not behind on your car loan and the car is necessary for your daily life, the lender may allow you to keep the vehicle, especially if you're current on your payments.
However, Bridgecrest may require that you sign a "ride-through" agreement or that they approve the arrangement. This means they would not require you to reaffirm the debt, but you would still be responsible for making payments as long as you're current. Keep in mind that without reaffirming the loan, Bridgecrest cannot pursue you for any deficiency after your bankruptcy is discharged if the car's value does not cover the loan balance.
The fact that you do not want to reaffirm the loan is your choice, but it may impact your ability to keep the car in the long term. If Bridgecrest agrees to let you continue making payments under these conditions, they may still reserve the right to repossess the car if you fall behind on payments. Be sure to communicate clearly with Bridgecrest to understand their policy and get any agreements in writing.
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