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Does bankruptcy pay off my car loan?

After careful consideration, I've realized that I'm probably going to have to declare bankruptcy. I know that Chapter 7 pays off some of your loans. Will it pay off my car loan?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Sorry to hear about your financial situation! Unfortunately, Chapter 7 bankruptcy doesn’t pay off your car loan. However, you have several options instead:
  • Surrender the car and use the proceeds from the auction to pay off your car loan
  • Reaffirm your loan and agree to a new payment plan
If you want to keep the loan, obviously the latter is the better option. But always do what’s best for your particular situation.
When you reaffirm your
car loan
, you may also want to reconsider your car loan coverage. You’ll still need to have full coverage, but you can use the
Jerry
 app to compare rates from top insurers. We’ll get you customized quotes from top providers instantly, so all you have to do is pick the plan that works best for you.
Best of luck, and hoping your financial situation improves!
MORE: Can I keep my car in a bankruptcy?
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