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Will I lose my car if I file for bankruptcy? 

In Chapter 7, you can keep your vehicle if the equity in it fits within your bankruptcy exemptions.  If the equity is greater than your exemptions, the Chapter 7 trustee can sell the vehicle to pay creditors.  If there is a loan on the vehicle, you must maintain your contract payments to the lender or they may request court permission to repossess the vehicle.

In Chapter 13, you keep your vehicle, even if the equity in it exceeds your exemptions.  If there is a loan on the vehicle, it can be restructured and repaid as part of the Chapter 13 payment plan. If you are behind on your vehicle loan payments, Chapter 13 will prevent the vehicle's repossession.

Leased vehicles normally have no equity and therefore you have no equity interest to exempt.  However, payments must be made on time or the lessor will seek court permission to repossess the vehicle.

For more information about bankruptcy, please call us at 408-294-6100, or e-mail us via info@sjconsumerlaw.com.  One of our attorneys will be able to answer any questions which you may have in greater detail.  Please remember that the foregoing information is of a general nature, and does not constitute legal advice.  The facts of each situation are unique, and we must discuss those facts with you before any advice can be given.

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Revised
February 21, 2005

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