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Chapter 7: Keeping Your Vehicle With an Affirmation Agreement


If you are getting ready to file for bankruptcy, you may be very excited about the prospects of seeing your financial slate cleared, and having the opportunity for a do-over. In the Chapter 7 bankruptcy, you can look forward to most of your unsecured debts being discharged in a short amount of time (generally three to six months), along with keeping many of your possessions that may be considered exempt.

There are some anxieties that typically accompany the bankruptcy process as well though, from concerns regarding what friends, family, and co-workers will think, to worrying about the negative consequences to your credit. Most prevalent, however, is the concern about what will happen to items like your car—and how hard you might have to work to keep it.

The process for keeping a vehicle—or not—is fairly cut and dry in the Chapter 7 bankruptcy. You may not want to keep your vehicle, whether you have keeping up with payments or not—and whether you financed the car or were leasing it. If that is the case, you can choose to surrender it, either turning it in to the lender or allowing it to be repossessed. While you will no longer be responsible for the debt, there could be repercussions for a co-signer, as they are potentially expected to pay the full sum of any deficiencies. These concerns, along with any other bankruptcy questions, should be discussed with an experienced attorney, such as those you will find at Fitzgerald & Campbell, APLC.

If you’ve decided that you do want to keep your present vehicle, you can buy the car outright via redemption, which means that you give a lump sum to the bankruptcy trustee for the current value of your car. If you have been having trouble making payments but you do want to keep the car, there is the possibility that you can renegotiate your car loan with your current lender through an affirmation agreement. Getting the ball rolling is as easy as checking off a box on your bankruptcy paperwork indicating that you want to reaffirm. After that, your lender should send you the paperwork and you—or your bankruptcy attorney—can begin negotiating the terms. And while you may not receive all that you ask for, this is a great time to ask for a lower interest rate, waived fees, or other desired terms.

If you are thinking about filing for bankruptcy or exploring other options for debt reorganization, contact us at Fitzgerald & Campbell, APLC. Our attorneys have decades of experience in serving clients in similar financial situations. Let us review your case and discuss what would work best for you. We are here to help!

Call us today for a free consultation at (844) 431-3851, or email us at

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