What happens if one person on a car loan files bankruptcy?

If you are the cosigner of a loan and you file bankruptcy, then you are no longer liable for the debt if the person you cosigned for stops paying. As long as they pay the debt, they can keep the vehicle and their credit history will not be affected by your bankruptcy filing.

How many cars can I keep if I file bankruptcy?

In some cases, you can keep two cars when you file for Chapter 7 bankruptcy. But you’ll need to be able to protect all of your vehicle equity using a bankruptcy exemption.

Can I keep my car if I file for Chapter 7?

If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments. They may also give you the option to pay off the equity at a discount in order to keep the car.

How long should I wait to refinance my car after Chapter 7?

You can refinance a post-bankruptcy car loan, but you generally have to wait for at least a year to pass in order to qualify – as is the case for any other auto loan.

What happens to your car when you file bankruptcy?

Your Car in Chapter 13 Bankruptcy. If you file for Chapter 13 bankruptcy, you’ll pay your disposable income (the amount remaining after paying allowed expenses) to your creditors for three to five years. You can use Chapter 13 bankruptcy to repay many different types of debt, including car loans.

Can a car loan be discharged in Chapter 13 bankruptcy?

You can use Chapter 13 bankruptcy to repay many different types of debt, including car loans. Here are some choices you and your attorney will consider. Surrender the car. Just like in Chapter 7 bankruptcy, if you give your car back to the lender and complete your Chapter 13 plan, the bankruptcy will discharge any remaining loan balance.

Can you get a shorter car loan in bankruptcy?

For instance, you’ll likely be able to stretch out a shorter car loan to the full five years of the plan. Also, if you’ve had the car loan at least 910 days (two and a half years) when you file your bankruptcy, you might even be able to “cramdown” the loan amount.

Can you get out of a car lease in bankruptcy?

One of the benefits of bankruptcy is that you can get out from under an oppressive car loan or lease. And, unless you have an expensive luxury car that you own outright or a valuable antique, it’s not likely that you need to worry about losing the car in bankruptcy—but that’s not always the case.

What happens to my car when I file bankruptcy?

If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments. And if the market value of a vehicle you own outright is less than the exemption amount, you’re in the clear.

Can a car loan be reaffirmed in bankruptcy?

Contact your car lender if you wish to pursue a reaffirmation agreement. A reaffirmation agreement must be approved by the bankruptcy court. Many bankruptcy courts take the position that a reaffirmation should not be approved if the lender does not reduce the interest rate or the principal balance of the loan.