Can I keep my car if I file bankruptcy?

| Aug 7, 2018 | asset forfeiture |

If your debt becomes uncontrollable, you may have no choice but to file for bankruptcy in New Jersey. Doing so will change your finances and possible lead to you losing some of your assets. If you have an auto loan, you may wonder if there is any way to keep your vehicle, especially if it is the only one you have.

According to Bankrate, whether you can keep your car in a bankruptcy depends on your lender. You cannot leave the auto loan out of your bankruptcy as it will automatically be included. This means your bank could take the vehicle back to satisfy the loan. If you want to keep it and not have it seized as part of your bankruptcy, then you need a reaffirmation agreement. This agreement is made with the court and is a promise that you will repay the debt.

If you really need the vehicle, then this could be a good option. In addition, in some cases, the lender will continue to report your good payments, which can help your credit to rebound after filing the bankruptcy. However, some creditors will not report. Furthermore, you will leave your bankruptcy with debt, which is not the ideal situation since the whole point is to wipe out debt.

It is important to weigh your options. Talk with your lender and your legal representative. See what makes the most sense for your situation. Often you have to do whatever will help you continue on after the bankruptcy. If you need the car to get to work, for example, then you probably should get the reaffirmation agreement. This information is for education and is not legal advice.