You can. A lot of people call me asking that question and sometimes they want to get rid of their car, and that is possible. It can definitely get included in the bankruptcy. If you’re current on your car in a chapter seven, it is safe. We do obviously have to make sure that you don’t have too much equity in your car. Equity is when your car is worth $10,000, for example, and you only owe $2,000 on it. In this hypothetical scenario, you would have $8,000 of equity in it. There are exemptions in Washington that cover that equity to a certain extent and we will definitely sit down and go through that and make sure that it’s covered. But as long as you’re current and it’s covered in a chapter seven, you are able to keep your car and just continue making payments.
You sign what’s called a Reaffirmation Agreement. That agreement is just a new contract with your car company saying that you want to keep it and you’re still going pay for it and they say, “That’s great. Then you can, as long as you sign this agreement that keeps it on your credit after filing.”
If you were behind on your car and you want to keep your car, there is still a way to do that. Some companies will let you get caught up on it if it’s not too far behind in a chapter seven. Otherwise we would look at a chapter 13 and that’s where you would pay it over time and we get caught up on that past due amount over time. So a chapter 13 is great for lowering your interest rate on the car and also allow you a little bit extra time to get caught up on the payments and continue making them over the life of your bankruptcy plan. So that would be something that we would sit down and figure out which way you would like to go on that during our consultation.