Car repossessions and bankruptcy

If your car is repossessed you will likely owe the finance company or bank for the costs connected with repossessing your car. More so, you may owe for the difference between what you owed on the vehicle and the amount for which the car was sold at auction. This gap is referred to as a deficiency.

Both the repossession costs and any potential deficiency are dischargeable through a bankruptcy filing.

If your car is repossessed, bankruptcy can also get your car back. Timing and type of bankruptcy are factors in whether your car can be reclaimed if you file for bankruptcy.

Bankruptcy and car loans: Can you keep your car if you file for bankruptcy

Yes. If you are making payments on a car loan and file for bankruptcy you can keep your car. You have to keep making your payments and, if you don’t, you can’t keep your car even if you filed bankruptcy.

The terms of your loan (how much you pay, how long you pay, etc.) are not normally changed just because your file bankruptcy. But know your car finance company cannot take your car if you are making your payments just because your file bankruptcy.