Many clients are understandably concerned about losing their car or truck after filing bankruptcy, especially if they have a loan on that vehicle. They worry that the auto lender will repossess the vehicle after receiving notice of the bankruptcy from the Court. Protecting the client’s property in bankruptcy is one of the fundamental responsibilities of the attorney. Making sure that a client’s transportation is safe and secure is a primary task in nearly every case. Fortunately, bankruptcy law provisions regarding those debts secured by property, specifically automobile loans, protect debtors from repossession after the bankruptcy filing.

As long as the bankruptcy debtor is current on the auto loan, the auto lender may not take any action to repossess the vehicle. In other words, to keep your car, truck, motorcycle, recreational vehicle, or boat, simply stay current on the payments and the property is safe. Again, a lender, whether a bank, credit union, or other financial institution, cannot repossess a vehicle if the debtor keeps the monthly payments current.

Caveat: There may be a requirement that the debtor and lender enter into a reaffirmation agreement to allow the debtor to keep it—that reaffirmation agreement and its terms and consequences should be explained by the debtor’s attorney prior to any consideration of signing the agreement.

The bottom line is the good news that any debtor who chooses to keep a vehicle in bankruptcy may do so by simply maintaining the monthly payment.

To learn more about keeping your vehicles in bankruptcy, call an experienced bankruptcy attorney who can answer your questions and give you expert advice. For 27 years, I’ve helped literally thousands of residents of Sonoma, Marin, Napa, and Lake Counties file bankruptcy and get a fresh start.

For a free consultation about your options, call the Law Offices of Brian Barta at (707) 542-2844