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Can I surrender my car if I can afford the payments after a chapter 7.

Portsmouth, VA |
Attorney answers 4

Best Answer

During a Chapter 7 Bankruptcy you are required to state your "intentions" with regards to secured creditors such as vehicle loans. In general, you only have three options: reaffirm, surrender or redeem. Reaffirm means to reobligate yourself once again on the vehicle loan making it a debt that survives the bankruptcy. If you miss payment or the vehicle is repossessed after the bankruptcy you will owe any balance due.

Surrendering a vehicle is quite clear but you have a fixed time to honor this commitment. Speak with your bankruptcy attorney about this timeline.

Redeem is to pay the fair market value of the vehicle, generally based on the Kelley Blue Book or NADA guide, and wipe out any balance owed above this fair market value. Most people going through bankruptcy unfortunately do not have this kind of cash laying around.

If you have already filed your bankruptcy then whether you are able to surrender the car depends on whether you signed a reaffirmation. You need to move quickly and check on this. You can rescind a reaffirmation prior to the discharge.
If you have not already, seek the advice of an experienced bankruptcy attorney. I wish you luck.

John G. Merna, Esq.
The Merna Law Group, PC
3623 Virginia Beach Blvd.
Virginia Beach, VA 23452

This answer in no way creates an attorney-client relationship. The answer is not a complete answer and requires additional facts in order to provide the best options. The submitter accepts the risk of relying on such an incomplete answer and waives any claims of damages for doing so. As stated in the answer the submitter should contact a qualified bankruptcy attorney is discuss these issues further before any action is taken. Any action taken without advise and counsel of a qualified attorney is inadvisable.


I'm not sure I entirely understand your question but you can surrender the car in a Chapter 7. It has nothing to do with whether you can afford it. Keeping it depends on whether or not you can afford it.

Obviously I don't know what your specific income/expense breakdown is, but you should also make sure you qualify for a 7 without the car payment. Not having a car payment can affect the means test and can push you into a Chapter 13. Talk to a bankruptcy attorney in your area.

I wish you the best of luck!

The information provided in this post is not "legal advice." Rather it is general information on common legal issues. If you have questions concerning your specific situation, it is always best to consult an attorney in your area.



Thanks, your reply is very helpful.


Sure, you can always surrender your vehicle after filing Chapter 7. There can be some strategic reasons for delaying making this decision when you file Chapter 7, so always discuss this issue with your attorney. After all, you may need to pick up another vehicle before you surrender your current vehicle, unless you like walking in the summer heat!

Hope this perspective helps!



Thanks, yes it helpled


Yes, you can surrender your car after filing a Chapter 7. You just want to make sure you do not reaffirm the car loan within your bankruptcy case. If you reaffirm, you may get stuck with a deficiency. If you do not reaffirm, you can surrender the car anytime, even a year after your bankruptcy, and not get stuck with a deficiency.

When you surrender the car may impact your Means Test and your ability to get another car loan, if that is needed. Discussing these issues with an attorney is a good idea.



Thanks. I will be discussing them with my attorney on Monday.

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