Can I Keep My Car If I File For Bankruptcy in Denver?

You Might be Able to Keep Your Car if You File Bankruptcy in Denver

One of the most common questions I’m asked by my clients is, “Can I keep my car if I file bankruptcy in Denver?”

The answer is simple:


There are two types of bankruptcy. The first is Chapter 7 bankruptcy, which is also called the “fresh start” bankruptcy. The second is Chapter 13 bankruptcy, which is also called the “catch your breath” bankruptcy.

With both types of bankruptcy, you might be able to keep your car under certain circumstances. Let’s discuss these further to see where you might stand.


Chapter 7 Bankruptcy in Denver

If you have a loan on your your car or truck and you’re current with your payments, then a Chapter 7 bankruptcy filing will allow you to keep your vehicle.

You can also keep your vehicle in a Chapter 7 filing if the Court believes your vehicle is a “life necessity,” such as for getting to work.

But if you’re behind in your car payments, then a Chapter 7 filing will not allow you to keep your vehicle.

Chapter 13 Bankruptcy in Denver

If you’re behind in your car or truck payments but want to keep your vehicle, Chapter 13 bankruptcy will allow you to make an agreed payment plus make up for missed payments over time.

The time you’ll have to make up for the payments is usually three-to-five years, depending on the terms of your bankruptcy filing.

With Chapter 13, the goal is to keep as much as you can by combining multiple debts into a single monthly payment you can afford. You must keep up with your payments over time. So if keeping your vehicle or other assets is important to you, or if you don’t qualify for Chapter 7, then Chapter 13 might be your answer.

What if You Don’t Want to Keep Your Car?

Some people owe more on their car than it’s worth. This is called being “upside down,” and this is one of several common reasons people get behind in paying their bills.

If you owe $10,000 on your car but it’s only worth $5,000 and you’re paying interest on top of that, you might not want to keep your car.

If this sounds like you, then Chapter 13 might not work for you because with Chapter 13, you will be repaying all of your debts over time, including your upside down vehicle.

But you need a car to get to work, right?

Well, the good news is that even after you file Chapter 7 bankruptcy and even after you surrender your vehicle, there are several lenders that specialize in providing credit to people exactly like you. Here’s just one example, but a simple Google search will show you that you are not alone in this and that you will likely have auto credit options after bankruptcy.

What Should You do Now if You’re Thinking about Bankruptcy?

Contact me immediately to discuss your case. There’s a lot of work for you to do to help me fully understand your situation and to take appropriate action on your behalf. Together, we can get to work on your filing and begin to get you a fresh start toward a better financial future.

The information in this blog also pertain to other Denver metro cities including Aurora, Centennial, Englewood, Littleton, Parker and more…

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