How to keep a car when filing for bankruptcy

When many consumers file for bankruptcy, one of their primary concerns is whether or not they will be able to keep their car.

The answer is a bit complicated, but one way for consumers who have filed for Chapter 7 bankruptcy to ensure that they get to keep their vehicle is to sign an agreement with their lender that states they will repay all or a portion of a loan that would have otherwise been discharged in the filing. The financial news website Bankrate said that most lenders require consumers who have filed for bankruptcy to sign such an agreement. They are also required for any other asset or possession the consumer would like to keep through their bankruptcy proceedings.

Bankrate said that even if lenders accept monthly payments throughout bankruptcy proceedings without requiring such an agreement, any money put toward the loan after the filing is settled may not show up as positives on a credit report.

New York bankruptcy attorney Jay Fleischman also advises consumers that their vehicle may actually be exempt from Chapter 7 bankruptcy proceedings. Any vehicle with a value lower than $2,400 above an outstanding loan does not have to be part of the bankruptcy.