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Can I keep my car in a Chapter 7 bankruptcy?

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Question:

I am thinking about filing for chapter 7, but I have to be able to keep my car to get to and from work. Will I be able to keep my car if I file?

Answer: (1)

In Chapter 7 bankruptcy, whether you can keep your car depends on how much equity you have in it. If your equity (if you have any) is exempt, you can keep your car.

Most people don't have a lot of equity in their car because cars values depreciate so quickly. And most states exempt some equity in a car -- so even if you have some equity, it is likely protected. 

Of course, you must stay current on your car payments. And you may have to reaffirm your car loan. 

For in-depth information about your car, and keeping your car, in Chapter 7 bankruptcy, see Your Car in Bankruptcy.

Posted by Staff Attorney on 14 Apr 2010

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