Can I keep my Car after bankruptcy?

Can I keep my house after bankruptcy?

It’s a simple question and one that everyone in this boat has on their mind. What can I keep after I file for Chapter 7 Bankruptcy. We declared that we wanted to keep our home and car. Because the declared value of our jewelry (i.e. wedding ring) was what the court would consider low, it’s not even a concern. Regarding furniture, televisions and computers (like those I bought with the Dell credit card) are not a problem. They were purchased between 2-3 years prior to us filing for bankruptcy and depreciation has made their resale value very low.


Lets talk about the car(s). We own two cars:

1. 2000 4-door (family car) Chevy which we own out right and has no loans/liens on it. The attorney used Kelly Blue Book.com as a means for appraising the vehicle. I don’t know that I necessarily agree, but he declared its value at $1,800.
2. 2000 4-door Hyundai which I currently owe $3,500 on.Kelly Blue Book values my car at $1,200. Again, I disagree with that but it shows that I have reverse equity on the car and makes repossession from the bank an option that they wouldn’t want to take.

Seriously, if they took the car from me they’d need to recover the loss on the difference, which would never happen. To allow me to reaffirm the loan is a much smarter move. So after we file and the court declares it final, the banks attorney will send the reaffirmation paperwork. It doesn’t lower my payments or increase any more time on the loan, it just tells the bank that I promise to keep paying it.

Now the house on the other hand is fairly easy (as I understand). The new laws do not require you to reaffirm your mortgage with your lender. There will be no need for new paperwork or the dreaded thought of going through closing again. You keep your house, you keep your mortgage payments and in a few months after you file, you’re an ordinary customer to the bank again.

My next post will be about preparing for the hearing.

- AJ