Can I Keep My Car If I File for Bankruptcy?
- McMann, P.A.
- Mar 11
- 2 min read
One of the biggest concerns people have when considering bankruptcy is whether they will be able to keep their car. Losing a vehicle can be devastating, especially if you rely on it to get to work, take your kids to school, or handle daily responsibilities.
The good news is that bankruptcy doesn’t always mean losing your car.
At McMann, P.A., Attorney Mark McMann helps individuals in Lakeland, Tampa, Orlando, and throughout Central Florida navigate bankruptcy while protecting their essential assets, including their vehicles.
How Bankruptcy Affects Car Ownership
The ability to keep your car when filing for bankruptcy depends on several factors, including:
The type of bankruptcy you file (Chapter 7 or Chapter 13)
The value of your car
Whether you are behind on car payments
Florida’s bankruptcy exemptions
Keeping Your Car in Chapter 7 Bankruptcy
Chapter 7 bankruptcy, also known as liquidation bankruptcy, eliminates unsecured debts, but a trustee may sell non-exempt assets to repay creditors.
Here’s how it impacts your car:
Florida’s Vehicle Exemption in Chapter 7
Florida allows you to protect up to $1,000 in vehicle equity under its state exemption laws. If you don’t use Florida’s $4,000 personal property exemption (available if you don’t claim a homestead exemption), you may apply that amount toward your car, allowing you to protect up to $5,000 in equity.
What If You Owe Money on Your Car?
If you are current on car payments, you can usually keep the vehicle by continuing to make payments.
If you have significant equity exceeding exemptions, the trustee may sell the car to repay creditors.
If you are behind on payments, the lender may still repossess the car, even after bankruptcy.
You may have the option to reaffirm the car loan, which means agreeing to keep making payments despite the bankruptcy.
Keeping Your Car in Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a reorganization bankruptcy, allowing you to catch up on missed car payments through a structured repayment plan lasting 3-5 years. It can help in the following ways:
Stops repossession immediately upon filing.
Spreads out car payments over the repayment plan, making them more manageable.
Allows for a cramdown, reducing the car loan balance to the vehicle’s actual value (available if you’ve had the car loan for at least 910 days).
What If Your Car Is Already Repossessed?
If your car has been recently repossessed, Chapter 13 bankruptcy may allow you to get it back—provided you act quickly and include missed payments in your repayment plan.
Should You File for Bankruptcy to Keep Your Car?
Every financial situation is unique. Filing for bankruptcy may be the best option to eliminate debt, stop repossession, and get a fresh start—but the right strategy depends on your income, assets, and goals.
McMann, P.A. Can Help You Protect Your Car
If you’re facing financial struggles and worried about losing your vehicle, McMann, P.A. is here to help. We will assess your situation and guide you through the best bankruptcy options to protect your assets and financial future.
Mark D. McMann
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