Can I Save My Car?

Keeping their car is a big concern for people who consider bankruptcy as a means for getting their debt problems under control.

Keeping your car involves exemptions that protect your stuff through the bankruptcy process.

Most people know about the homestead exemption, which protects your home from your creditors. There are also exemptions for many other things you own, like a car, household goods and furnishings, tools of the trade, and so on.

Assuming they qualify for bankruptcy relief, nearly all people I see in debt consultations have no problem keeping all of their possessions as they go through the bankruptcy process.

Typically, the only reason a Texas resident loses a car in bankruptcy is that their situation changes somewhere along the way and they no longer can afford to keep paying their car payment.

Big difference for Texas residents

Although bankruptcy is federal law, the exemptions you get to use are different in each state.

The exemptions available to Texas residents are probably the most generous of all of the states. For that reason, make sure that you are getting your information from a Texas bankruptcy attorney when you have a question about what is protected in your bankruptcy case.

If the information in this chapter seems different from what you are reading on the Internet, then it was likely written by an attorney that practices bankruptcy in a different state.

There is a general rule in bankruptcy and outside of bankruptcy: If you want to keep your possessions, then you must continue to pay for your possessions. So, if you want to keep your car, you simply keep paying for it.

What if my car is paid off?

In bankruptcy, you protect your car by claiming it as exempt under specific exemptions. In a typical bankruptcy case for a Texas resident, everything is protected and the person who files bankruptcy gets to keep everything that they own.

If a client owns something that cannot be protected and claimed as exempt in a Chapter 7 bankruptcy, then the person has the option of either not filing bankruptcy or choosing a Chapter 13 bankruptcy so they can keep their stuff even if it is not protected by an exemption.

Find Out If Bankruptcy Will Work For Your Situation

Since there is so much riding on this issue, be sure to talk with someone that understands the exemptions available to people that file bankruptcy in Texas.

Take the first step in getting your questions answered by calling us to schedule a free, no-obligation consultation.