Worried about keeping your car if you file bankruptcy in Georgia? You’re not alone. Many people in Newnan and Coweta County rely on their vehicles for daily life, and the thought of losing it can be stressful. Fortunately, bankruptcy often gives you options to keep your car depending on your loan status, the value of your car, and the type of bankruptcy you file.
Keeping Your Car in Chapter 7 Bankruptcy
Chapter 7 is commonly called the liquidation bankruptcy, but that doesn’t mean you automatically lose everything. Georgia law allows you to protect up to $5,000 of equity in your car, or $10,000 if you file jointly with a spouse and both own the vehicle. If your car is paid off or has low equity, this exemption can help you keep it.
If you still owe on the loan and are current with payments, you can choose to reaffirm the debt and keep the car. If you’re behind or no longer want the vehicle, you can surrender it and eliminate the debt, which is useful for upside-down or unreliable vehicles.
For example, if your car is worth $9,000 and you owe $4,000, your equity is $5,000. You can likely keep the car as long as you’re current or can catch up quickly.
What Chapter 13 Bankruptcy Can Do
Chapter 13 allows you to reorganize debt through a three to five-year repayment plan. This is often the best option if you are behind on your car payments or at risk of repossession. It allows you to catch up on missed payments, possibly reduce your loan balance or interest rate, and stop repossession efforts through the automatic stay.
You may even be able to “cram down” the loan if the car was purchased more than 910 days ago, which reduces the balance owed to the car’s current value. This is especially helpful if you owe more than the car is worth or have multiple loans.
Can I Get My Car Back If It’s Already Repossessed?
If your car has already been repossessed but hasn’t yet been sold at auction, there may still be time to get it back. Filing bankruptcy quickly can stop the sale and potentially allow you to recover the vehicle. Timing is critical, so if this applies to you, call our office immediately.
What If I Just Want to Get Rid of the Car?
If your vehicle is worth less than you owe or requires expensive repairs, bankruptcy gives you the option to surrender it and eliminate the loan. You won’t be stuck with a monthly payment on a vehicle you no longer want or can’t afford.
Local Help in Newnan, GA
At our Newnan office, we help people across Coweta County understand their options and make informed decisions about debt relief. Whether you want to keep your car, stop repossession, or surrender a vehicle that no longer makes financial sense, we’ll guide you through the best option for your situation.
Need help understanding what happens to your car in bankruptcy? Schedule a free consultation with Attorney H. Brooks Cotten today. We’re here to help people across Newnan, Peachtree City, Fayetteville, and beyond get the fresh start they deserve.
