Mar 04, 2009

Cars in Chapter 7 Bankruptcy -- What Happens?

People often ask me about how Chapter 7 bankruptcy will affect their ability to keep their car. If you aren't making payments on a car, then it's just a matter of using whatever exemptions are available to keep it, just like any other asset. However, if you are making payments on your car, it's not so simple. As part of your bankruptcy you must decide how you want handle the note. You do this by filing an official form called the Statement of Intention (SOI) with your other bankruptcy papers as well as mailing a separate copy of the SOI to your lender. I go into more detail on this in a new article on Nolo's website: What Happens to Your Car in Chapter 7 Bankruptcy?