Keeping Your Car in a St. Louis Chapter 7 Bankruptcy


When you file a St. Louis Chapter 7 bankruptcy, all of your unsecured debts are discharged.  This would include things like credit cards, medical bills, payday loans, deficiencies from a repossession or foreclosure, and insufficient funds from an overdrawn bank account.  If you own any secured assets (like an automobile or real estate that has a car note or mortgage attached thereto), it is possible to keep those items so long as there is not significant equity in the asset.  So if you own a 2010 Honda Accord with a loan balance of $20,000, there is not going to be an equity issue since such a vehicle carries a fair market value of approximately $18,000 (as of December 2011).


Keeping the asset such as a car in a Missouri or Illinois Chapter 7 involves a process known as ‘reaffirmation of the debt.’  This is where you promise, in writing, to continue making regular, monthly payments on the loan.  In other words, if you wish to keep the vehicle, you will have to continue paying for it.  One common misperception is that filing bankruptcy will eliminate the car loan altogether, giving you the opportunity to own the automobile free and clear of all debts.  While it is possible to surrender any secured asset you currently own through a bankruptcy (and therefore get out from underneath the loan attached to it), retaining the car will require that you keep up on the month-to-month payments. 

The affordable St. Louis bankruptcy attorneys at The Law Office of Jennifer Alter-Rieken have been helping clients keep their cars, trucks, and vans in a bankruptcy for years.  Our goal is to make sure you maintain ownership of the things you want, and get rid of the debts you do not.  And once the bankruptcy is complete, you will be on your way towards the fresh start / clean slate you deserve.  

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