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Keep and Pay question

Hayward, CA |

Which states allow Keep and Pay as an option on keeping your car in a chapter 7 bankruptcy as long as you make the payments.

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Attorney answers 3


It's not about the State ... it's about the lender; and very few of them these days (except for Ford and certain Credit Unions) are interested in repossessing a vehicle if the payments are current. There are ways (you'll need to check with your attorney) to sign a ReAff and legally retain the vehicle after the ReAff is rejected (with your blessing) by the Court ... but this maneuver will depend on your judge.


Bankruptcy law is federal. There is nothing state-specific about the alternative for intentions regarding secured collateral. Some creditors will represent that "retain and pay" no longer exists. That may be true in terms of a "right" to retain and pay, but as a practical matter many creditors allow that result, and many experienced bankruptcy attorneys actively discourage reaffirmation.

Bankruptcy is a complicated legal proceeding, a minefield for irrevocable self-inflicted damage. Wise debtors retain attorneys.

Best wishes for an outcome you can accept, and please remember to designate a best answer.

This answer is offered as a public service for general information only and may not be relied upon as legal advice.



Ms. Sinclair do you know if Toyota Financial is one of them that allows that?


The law is quite clear that retain and pay is no longer an option. However, certain lenders do not exercise their rights to repossess as long as you are current on your payments. This is not an issue of where you are, but one of who you borrowed from (and lenders do change their approach)

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