If my car is worth $3,000 and I owe $5,000 on it, if I go bankrupt then I get to keep my car and wipe out the debt owing on it, right?
car loan and bankruptcy
posted by Questions @
1 Expert Comment:
At February 12, 2009 |
7:09 am
, Barton Goth, Trustee in Bankruptcy Said...
No. When you pledge a vehicle, or any asset, as security against a loan what you have done is given the secured creditor the right to seize the vehicle if you do not make the payments. This security right operates the same way even if a bankruptcy if filed, the creditor has the right to the vehicle. So if you want to keep your car, then you have to continue to pay the car loan.
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