Can I file for bankruptcy if I still have a car loan?

On the advice of my lawyer, I might need to file for bankruptcy, but I still have a car loan. Can I still file for bankruptcy? What happens to my car?

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Answer provided by
Eric Schad
Answered on Jul 12, 2022
That’s a tough situation to be in. The good news is, you can still file for bankruptcy even if you have a car loan, but what happens afterwards may be more complicated
Contrary to some popular beliefs, you don’t get absolved of your car loan, even in Chapter 7 bankruptcy. You still have to pay for the car loan to keep the car, or you can surrender it to the lender via a voluntary repossession.
If you want to keep the car, you’ll have to pay back any amount owed and keep up with current payments. This is often referred to as reinstating the car loan. In some cases, your lender may also work with you to make more affordable monthly payments, so making a call to your lender is well worth the effort.
Remember that you will still need to keep car insurance on the vehicle, so budget for that accordingly. To save some money, hop onto the Jerry app. Jerry pulls quotes from up to 50 providers so you can get the most affordable coverage for your car insurance needs.

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