Quick Answer: During Chapter 7 bankruptcy, keeping a car with high payments can hurt more than help because reaffirmed debt cannot be discharged in future bankruptcies. Bankruptcy attorneys typically advise against reaffirming unaffordable car loans that would leave filers financially stretched after discharge.
“Dear Steve,
I’m going to file a Chapter 7 bankruptcy and I would like to keep my car but I might not have enough exemption. Even if I do the judge may not allow me to reaffirm the car loan because the payment is so high. So I don’t know if I should keep making the payment on it and then risk losing it.
Veta”
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Dear Veta,
I really think this is a situation you need to discuss with your bankruptcy attorney. If you don’t have a local bankruptcy attorney you can click here for a free bankruptcy consultation with one.
If the payment is high, and you are going to keep the car, by reaffirming the debt, it might be more than you can reasonably afford after your bankruptcy. If you reaffirm the debt, you will not be able to include that debt in a future bankruptcy if you run into trouble again.
The last thing you want is to go bankrupt and still just get by each month because you’ve kept commitments that are more than you can afford.
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the worst feeling is knowing that you may wake up one day to find your car missing from the driveway. I’m on the verge of losing everything becuase I am failing to keep up with my payments and what’s worse is my insurance is extremely high due to a DUI two years ago. I keep thinking, maybe I should let them pick up my car. Then at least I can get a cheap little car to get me from point A to point B. I have almost another 1.5 years left on the car but the interest on it is(18%) way too much for me cuasing my payments to be 300. I also pay my own rent, and am going to school right now(Paying my own tuition). Have any advice? Thank you!
the worst feeling is knowing that you may wake up one day to find your car missing from the driveway. I’m on the verge of losing everything becuase I am failing to keep up with my payments and what’s worse is my insurance is extremely high due to a DUI two years ago. I keep thinking, maybe I should let them pick up my car. Then at least I can get a cheap little car to get me from point A to point B. I have almost another 1.5 years left on the car but the interest on it is(18%) way too much for me cuasing my payments to be 300. I also pay my own rent, and am going to school right now(Paying my own tuition). Have any advice? Thank you!