Can You Keep a Car and File Bankruptcy?

keep your Car and File Bankruptcy

Table of Contents

If you’re an adult and you live in Kansas or Missouri, you probably need a car.  A car of some sort is almost essential to get to work, to the store, or to church.  Most adults have to have a car.  But if financial disaster strikes, can you keep a car and file bankruptcy?

The good news is you probably can keep your car and file bankruptcy.  The Bankruptcy Laws are designed to allow most debtors to retain their vehicle by reaffirming the car loan, or repaying the loan as part of a payment plan.


Types of Bankruptcy

In Chapter 7 cases, debtors who wish to keep their car can can do so and continue to make their car payments with a Reaffirmation Agreement.  A reaffirmation agreement is simple an agreement that allows the debtor to keep the car in exchange for continuing to make the ongoing loan payments.  The agreement is reviewed by the Court for undue hardship, but, if approved, it allows that loan to pass through bankruptcy unchanged.  Since most people need a vehicle to get around, this is welcome news.

In Chapter 13 cases, a plan is put in place that allows any debt owed on a vehicle to be repaid over a period of 3 to 5 years.  The payments are made to the Chapter 13 Trustee, who in turn makes the necessary payments to the car lender.  At the end of the case, the car loan is paid in full, and once again, the debtor is able to keep their vehicle.

Contact Kansas City Bankruptcy Lawyers

If you have questions about bankruptcy, please call our office for a free consultation. We have three convenient offices in the Kansas City area, Olathe, Northland and Independence. Phone number is 913-422-0909.

Author picture
Author picture

Jeffrey L. Wagoner


Bankruptcy Eligibility Tool

Are you 1 or more payments behind on any of these debts?(Required)

Your privacy is important to us. WM Law will protect your name and confidential information against disclosure, publication or unauthorized use. By clicking “Submit” you agree that WM Law may contact you (including autodials, pre-recorded calls, and texts) about your interest in finding an attorney. Consent is not a condition of the services. Our receipt of the information on this web site is not intended to create, and receipt does not constitute, a contract for representation by WM Law.