Can I keep my car if I file bankruptcy?
Can you keep your car if you file bankruptcy? Usually, in most cases, yes. You can usually keep one vehicle per licensed driver in the household in Texas. If you owe a debt on the car, for example, if it is being financed, then you would still be required to pay all or part of the debt if you want to keep the car. You might be able to reduce the payments and possibly even reduce the entire balance owed. Specifically, if you have had the vehicle financed for more than 910 days, you may be able to pay the creditor the value of the vehicle as opposed to the balance owed. This is often referred to as a "cramdown". It is only truly beneficial when the value of the vehicle is less than the balance owed.
But to answer the specific question, yes, you can usually keep your car when you file bankruptcy if you want to, and if you can afford it, and it is usually the case when the vehicle is reasonable and necessary. In addition, if you owe a debt on it, you usually have to pay all or part of the debt on it. You cannot usually eliminate the debt attached to the vehicle and keep the vehicle as well when you file bankruptcy.
The reason you cannot simply eliminate the debt that is securing the vehicle and also keep that same vehicle by filing a bankruptcy is because the title to the vehicle is not yours, and the owner is the company financing the vehicle, and they have a valid lien.
Remember, you might be able to lower the payments in a chapter 13 case.
Call us for a free consultation if you are in or around Houston and would like to speak to a bankruptcy lawyer for free. 832-209-8833