It’s a question we hear often from our potential clients in Queens, NY. If you file Chapter 13 Bankruptcy, you will be allowed to keep your car, even if you are behind on the Loan or Lease payments.
As soon as the chapter 13 is filed, that immediately stops the bank or lease company from repossessing the car.
At that point, you must address several issues.
First, you must be able to prove to the bank or leasing company that you have enough car insurance to cover a total loss. That way the bank or leasing company is protected.
At that point, you two things.
One, you can decided to surrender the car (some people make that decision when they are months and months behind) and the entire debt for the car is then classified as unsecured and becomes part of the bankruptcy, like credit card debt.
Two, going forward, you must make the normal monthly payment on time and in full, as well as take care of any arrears arranged through the bankruptcy.
If you’re struggling with debt, why not take a few minutes and call Zelenitz, Shapiro & D’Agostino at (718) 599-1111 to discuss your options. The call is free and there is no obligation.