What affect will filing chapter 7 bankruptcy have on my vehicle loan?
Filing chapter 7 bankruptcy will immediately stop repossession of your vehicle. You will have the option to “reaffirm” your vehicle loan, keep making regular payments and keep your vehicle, or you may voluntarily choose to “surrender” the vehicle to the lender and discharge any further liability on the loan. To reaffirm your vehicle loan you must either (a) be current on your loan, (b) bring your loan current within a couple of weeks after you file bankruptcy, or (c) work out a repayment agreement with your lender either before or after you file bankruptcy. Chapter 7 bankruptcy will not allow you to retain your vehicle if your vehicle loan is delinquent unless you work out an arrangement with your lender. If your vehicle loan is delinquent when you file chapter 7 bankruptcy and you do not bring it current or work out an arangement with your lender, your lender may file a “motion for relief from the automatic stay” asking the bankruptcy court for permission to repossess the vehicle.
