If you are like most people, you cannot live without your car. You need it to get to work, go to the grocery store, and generally to get to any place you need to go. If you are considering bankruptcy, you need to know, "can I file bankruptcy and keep my car? In most cases, you can keep your car in bankruptcy San Diego.
Whether you can keep your car generally depends on three factors that you need to discuss in detail with your lawyer: (1) how much equity, if any, you have in your car, based on the value of similar vehicles for sale in the San Diego area; (2) whether you are on time on your payments, if you have payments; and (3) if you are behind on your payments, whether you are willing to repay your missed payments.
In order for your lawyer to be able to help you keep a vehicle in bankruptcy, your equity in the vehicle should not exceed the amount of equity that you are permitted to have under your applicable exemptions. If you have more equity in your vehicle than your exemptions allow, then you either have to buy back the nonexempt equity (the amount of equity that is not covered by your bankruptcy exemptions) or let the San Diego bankruptcy trustee sell your car, pay you the exempt equity, and use the nonexempt equity to pay your creditors.
If you are on time on your loan payments, then you can keep your car in bankruptcy, whether you file under Chapter 7 or under Chapter 13, as long as you continue to make your payments and stay current on your car loan debt.
In San Diego county, car loan lenders typically do not let you miss more than a couple of months of payments before repossessing your car, so chances are if you are driving your car you are not more than 2 months behind on your payments.
In a Chapter 7 case, some car loan lenders will let you add 1 or 2 missed payments to a car loan reaffirmation agreement. Alternatively, depending upon the value of your vehicle, you may be able to rebuild your car loan by way of a car loan redemption. Redemption allows you to redeem (purchase) your car for the current retail value. There are lenders, both institutional lenders and private lenders, in San Diego county, that will give you a redemption loan while you are in bankruptcy.
In a Chapter 13 case, you will simply add your missed payments to your car loan balance and repay the total balance (including the missed payments) over a 3-5 year period through your Chapter 13 plan.
If you have a car lease in bankruptcy you can keep the car by assuming the lease in either a Chapter 7 or Chapter 13 bankruptcy. In almost all cases you will be able to assume your lease when you file bankruptcy in San Diego. An experienced attorney can tell you how your car lease will be treated in your case.
Call Bankruptcy Legal Center today to set up a free consultation with a San Diego bankruptcy attorney to discuss whether you will be able to retain a vehicle in bankruptcy, and what it will take on your part to keep your car.