Can I Keep My Car If I File Bankruptcy?

A paid-off car is an exemption question (Alabama vehicle, Georgia vehicle). A financed car is also a repossession and contract question. Equity above the exemption can be something a Chapter 7 trustee could take, or a number Chapter 13 has to account for.

Chapter 7 vehicles

Chapter 13 vehicles

Frequently asked questions

Related resources

• Alabama Vehicle Exemption in Bankruptcy — Alabama Vehicle Exemption in Bankruptcy

  When Alabama exemption law applies, Alabama does not use the same dedicated motor-vehicle exemption structure as Georgia. Vehicle equity is generally evaluated under the Alabama personal-property exemptions and any other applicable protections. A financed vehicle also requires a separate analysis of the lender’s lien, payment status, equity, and bankruptcy chapter.

• Bankruptcy and Car Repossession — Bankruptcy and Car Repossession

  Filing bankruptcy generally stays a repossession that has not been completed before the petition is filed, subject to the Bankruptcy Code’s exceptions and prior-case rules. If the lender already repossessed the vehicle before filing, the debtor’s remaining property rights and the possibility of recovering the vehicle can depend heavily on state law. Alabama and Georgia have different Eleventh Circuit precedent on this issue.

• Can I Buy a Car After Bankruptcy? — Can I Buy a Car After Bankruptcy?

  Yes. Buying a car after bankruptcy is common. Clearing credit-card and medical bills can free room in the budget for a payment. After Chapter 7, lenders set their own rules — the Bankruptcy Code does not ban auto loans. In Chapter 13, buying while the plan is running usually needs the trustee’s okay first. That is a normal step when you need the car for work, not a punishment.

• Car Loans in Chapter 13 Bankruptcy — Car Loans in Chapter 13 Bankruptcy

  Chapter 13 can provide a way to catch up a vehicle loan through the plan. Cramdown depends on the loan and statutory requirements. For a purchase-money debt incurred within 910 days before filing on a motor vehicle acquired for the debtor’s personal use, § 1325(a)’s hanging paragraph generally prevents reducing the secured claim simply to the vehicle’s value.

• Car Loans in Chapter 7 Bankruptcy — Car Loans in Chapter 7 Bankruptcy

  Chapter 7 does not rewrite a car loan over five years. You generally reaffirm, redeem in a lump sum, or surrender. Some lenders still take payments if you stay current without a reaffirmation. That is lender practice, not a general Code right, and the lien stays. Missed payments often lead to stay relief and repo.

• Georgia Vehicle Exemption — Georgia Vehicle Exemption

  When Georgia exemption law applies, O.C.G.A. § 44-13-100 includes a specific motor-vehicle exemption. Available wildcard protection may also apply depending on the current statute and the debtor’s other exemption claims. A financed vehicle still requires a separate analysis of the lender’s lien, payment status, equity, and bankruptcy chapter.