If I File For Bankruptcy, Do I Have To Include My Car?

I get this question a lot. I think what people are really asking about is whether or not they can keep their car. When I answer that, yes, you can keep your car, they normally look confused and ask, “Then why in the world do we need to put that debt in the bankruptcy?!”

When you file for bankruptcy (whether it is a St. Louis Chapter 7 or a St. Louis Chapter 13), the court requires that all your creditors (whether they are secured or unsecured) be notified of the filing. Unsecured creditors (things like credit cards, medicals bills, payday loans, etc.) are given the lowest priority. Therefore, these debts are discharged and cannot be reaffirmed (with a few exceptions).

Secured debts (like a mortgage or car loan) can be reaffirmed. In other words, if your desire is keep your car or house, you have the ability to continue making payments. The real difference involves which type of bankruptcy you file. If you file a Missouri Chapter 7, the car creditor will ask you to sign a reaffirmation agreement, wherein you promise to continue making payments on the loan after the case is discharged. In a Missouri Chapter 13, the car loan will be paid off as part of your repayment plan. Either way, if you want to keep the car, it is possible to do so.

If you have questions or concerns related to this issue, please contact the St. Louis bankruptcy lawyers at The Bankruptcy Company. Our staff is eager to help you, and all phone and office consultations are free of charge.