Most people who file for bankruptcy keep everything they have, their home, their car, their furniture, their jewelry. This is because the premise of Bankruptcy is to give you a fresh start. A person cannot come through a bankruptcy destitute and without any possessions. The process of filing for Bankruptcy includes certain “exemptions.” Exemptions let you keep assets that could be sold or liquidated for less than a specific dollar amount. While it is true that some people in rare cases might have to give up property, or might choose to give it up, Bankruptcy can be a valuable tool in helping you keep your property also.
When you file for Bankruptcy, you have at least three choices in how you deal with your car loan. You can surrender your car to the lender, you can reaffirm the debt (agree to keep up with the payments) or you can redeem it for its fair market current value.