Most potential clients that call me wonder if they can keep their car in bankruptcy. Everyone is fearful that they will lose their wheels, in addition to the other fears contemplating bankruptcy can bring.

The good news is that you’re really “in the driver’s seat” on that matter. Bankruptcy gives you more rights than you had prior to filing, and it does the opposite to creditors.

You can keep your current loan and just keep making the payments, or if you lease your vehicle you can keep making those payments. We do need to do a little bit of extra paperwork with the lender or lessor called a “reaffirmation agreement,” but that’s a pretty minor part of the process.

Additionally, the bankruptcy process gives you other opportunities you’d otherwise not have. You can “redeem” your car from the lender if it’s worth a lot less than the loan against it. That means getting a new loan on the car or truck from a lender that does this kind of lending.

Another strategy is to get a new car prior to filing and turning in the old car, if that’s an advantage for you.

If you own your car outright, the California exemptions that protect it are pretty generous for most people. Right now you can keep a car worth $5,350 with the car exemption alone. If your car is worth more you can use some of the “wildcard” exemption that is up to $28,225 in addition to the car exemption. That’s more than enough for most people.

The only time it becomes a challenge to keep the cars is when you also have a lot of equity in your home. Then other methods can be used that a bankruptcy attorney can help you plan.

So the bottom line here is that bankruptcy gives you more choices, not less. I have yet to see a client go without wheels. We are experts at LeverLaw in getting you the right choice where this critical part of resolving your debt in bankruptcy.