I have a car from Carmart. If I filed for bankruptcy, would I be a to keep the car? I still have 13 more months of payments ahead of me and because the payments are so ridiculously high, I just don’t think I can do it. I was told if I file for bankruptcy, a car cannot be taken away. I just find that too good to be true.
That is not quite the whole answer. If you file a Chapter 7 bankruptcy and you want to keep a car (or any other “secured” debt) you have to do a formal contract through the bankruptcy called a reaffirmation agreement. If you have been late on your payments your creditor might decide not to agree to allowing you to keep your car and you would lose your car. But if you file a Chapter 13 bankruptcy you will be paying your payment through the plan and the creditor cannot take your car away as long as you are making your payments.
A Chapter 13 will also often lower your car payment because the Courts allow a lower interest rate than most people are able to get on the open market and you have the whole term of the bankruptcy to pay your car in full.