Can I Keep My Car in a Chapter 7 Bankruptcy?

Minivan driver sits on side of road and holds his head during evacuation of his vehicle. Tow truck service business concept.

A question that is frequently asked is whether my clients can keep their car in a Chapter 7 Bankruptcy. The role of a Chapter 7 Bankruptcy is to wipe out certain debts. In a Chapter 7 Bankruptcy, you do not have the same statutory rights that you have in a Chapter 13 Bankruptcy to modify the terms of your car loan.  In a Chapter 7 Bankruptcy you either keep the car with the existing car loan or you surrender the car and the debt associated with it. When deciding to keep a vehicle, I analyze with my clients the following: 1) is there equity in the vehicle; 2) what is the interest rate and terms of the car loan; and 3) what is the condition of the vehicle? If the vehicle has equity, the motor vehicle exemption allows a debtor to keep the vehicle so long as there is $3,000 of equity or less per spouse. If the rate and terms of the car loan are unconscionable, you can surrender the vehicle and wipe the debt in the bankruptcy. And finally, if the vehicle is a lemon and is in constant need of repair, you can surrender the vehicle and wipe the debt. Now, if my client decides to keep the vehicle, then they also keep the loan with the same terms and conditions. It is important to fully analyze your options when deciding to keep your vehicle in a Chapter 7 Bankruptcy.

Please call me today at (801) 432-8682 to discuss your specific situation and how Bankruptcy may be right for you.

bankruptcy lawyer
Bankruptcy Attorney



Ryan E. Simpson
8833 S. Redwood Road, Suite C
West Jordan, Utah 84088
United States
Telephone: (801) 432-8682


Ryan E. Simpson


5.0 stars – based on 3 reviews
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