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Can I keep my car if I file for chapter 7 bankruptcy

Asked almost 3 years ago - Chicago, IL

Bankruptcy Chapter 7 Bankruptcy Filing for Bankruptcy

Hello,
I lost my job and about to go to forclosure. I am trying to see my property right now and I returned my car.
I was thinking for filing Chapter 7.
My question is I purchased a vehicle for my brother about 3 years ago which he is paying for and his payments are current if I file does he have to return his vehicle? He is also the co-signer on the vehicle. Thank you

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Attorney answers (3)

Henry Repay

Reputation Level 15

Answered almost 3 years ago. Bankruptcy Attorney in Belvidere, IL.

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You can probably file Chapter 7 bankruptcy without your brother's car loan being in jeopardy. The scope of this space does not afford an opportunity to assess the situation and fully advise you. I recommend you assemble for legal consultation: (1) your income information for September through February, including wages and unemployment during that period; (2) all your bills (several months' copies neatly assembled); (3) last four years' tax returns; (4) a credit report; and (5) other information that may apply, such as copies of lawsuits. Set up an appointment at your earliest convenience to afford the most opportunity in which to be advised about your best course.

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Russell A. Demott

Reputation Level 9

Answered almost 3 years ago. Bankruptcy Attorney in Summerville, SC.

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Probably not. As long as payments are made, he'll be able to keep it. You'll have to explain this to your attorney and disclose it on your schedules. There's probably no equity in the car, so the trustee won't want it. (It's likely worth less than what's owing). Your brother is the "equitable owner" of the car. You only have bare legal title.

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Kevin Lee Linder

Reputation Level 14

Answered almost 3 years ago. Bankruptcy Attorney in Springfield, IL.

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If your name is on the titel, then it is property fo the bankruptcy estate. If there is no equity the Chapter 7 trustee will "abandon" it or treat it as exempt. if there is equity in the vehicle then you can claim an exemption in Illinois of up to $2,400 in any one vehicle and get a $4,000 "wildcard" exemption in any manner of property that you wish to claim. The debt to you would be discharged, if your brother was a co signor it would not be discharged to him. If he was current on the vehicle payments then they would probably not come and repossess it -- btu you may wish to talk to the lender or advise your brother to refinance the vehicle, Yoru brother is a co signer so they probably won't come and reposses the vehicle but I advise clients to talk to the companies they wish to continue to do business with -- some auto finance companies repossess vehicles if the debtor does nto sign a reaffirmation agreement.

Talk to a reputable bankruptcy attorney in your area.

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