Last updated September 18, 2026
Short answer
Keeping a car usually requires two things: exemption protection for your equity, and a strategy for the lender. Chapter 7 options include stay-and-pay, reaffirmation, redemption, or surrender. Chapter 13 can catch up a car loan and, in some cases, reduce the secured claim.
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 an asset for the Chapter 7 trustee or a number that Chapter 13 must account for.
Chapter 7 vehicles
See Chapter 7 and car loans and reaffirmation.
Chapter 13 vehicles
See Chapter 13 and car loans. Cramdown and hanging-paragraph rules are fact-specific (purchase-money, 910-day period).
How Brock & Stout can help
We value the vehicle conservatively, apply the correct state exemption, and walk through reaffirmation, redemption, surrender, or Chapter 13. We do not guarantee you will keep a particular car.
Frequently asked questions
Negative equity means little for the trustee, but the lender still must be paid or the car surrendered. Chapter 13 may help if cramdown or a cure plan is available.
Related resources
- Alabama Vehicle Exemption in Bankruptcy — Alabama Vehicle Exemption in Bankruptcy
Unlike Georgia, Alabama’s main tool for a car is the personal-property exemption in § 6-10-6 (and any other specific Alabama provisions that apply). Equity above what you can claim may be exposed in Chapter 7 or paid in Chapter 13. The loan is a separate problem.
- Bankruptcy and Car Repossession — Bankruptcy and Car Repossession
Filing generally stays a repossession that has not already occurred. If the car was already taken, recovery is time-sensitive and not guaranteed. Chapter 7 and Chapter 13 offer different tools: stay, reaffirmation, redemption, surrender, or catching up arrears through a plan.
- Car Loans in Chapter 13 Bankruptcy — Car Loans in Chapter 13 Bankruptcy
Chapter 13 can stop a repo and pay a car loan through the plan. If the loan is a purchase-money security interest incurred within 910 days of filing, [§ 1325(a)](https://www.law.cornell.edu/uscode/text/11/1325)’s hanging paragraph generally blocks cramdown. Older or non-PMSI loans may be crammed down to 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, surrender, or in some districts keep paying without a reaffirmation (with lien risk). Missed payments lead to stay relief and repo.
- Georgia Vehicle Exemption — Georgia Vehicle Exemption
Georgia has a specific motor-vehicle exemption paragraph. You may also use wildcard leftover if the statute allows. A financed car still needs a loan strategy. Do not apply Alabama’s personal-property-only approach to a Georgia car.
Facing an urgent debt problem?
Talk with a bankruptcy attorney about garnishment, foreclosure, repossession, or a lawsuit. A consultation can explain options. It does not guarantee a particular result.
This page is general educational information about bankruptcy as of the date shown. It is not legal advice, does not create an attorney-client relationship, and does not guarantee results. Outcomes depend on individual facts and current federal and state law. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
