You’ll need to visit with an experienced bankruptcy attorney near you to make sure that you qualify to file Chapter 7 bankruptcy. Even though you’re currently unemployed, the Means Test considers your income over the past six months, so if you had income during the past six months, it’s conceivable that you might not currently qualify for Chapter 7 bankruptcy depending on the amount of your previous income.

If you do qualify for Chapter 7, then since your car payments are current, you probably would be able to keep your vehicle. However, there are a couple of factors of which you should be aware. In Oklahoma, a person filing Chapter 7 bankruptcy is allowed to exempt or protect a maximum of $7,500.00 equity in a car. So if you file in OK and have substantially more equity than $7,500.00 in your car, that could be a problem. If the exemption of equity isn’t a problem, then you just have to deal with your vehicle finance company. Most of those companies will allow you to keep the vehicle as long as you continue to make voluntary payments and stay current. However, some lenders such as Ford Motor Credit Co. will require you to sign and file a Reaffirmation Agreement in order to keep the vehicle.

Yes, that is possible although I generally advise my clients against reaffirming debts and and instead encourage them to stay current by making voluntary payments. Bankruptcy law is clear that reaffirmation is not and cannot be required on real property debts. And regarding auto finance companies, my experience is that most of those lenders do not require you to reaffirm the car note but are agreeable to you just continuing to make the payments. You don’t say where you live and as bankruptcy procedure and exemption laws vary by locality, I would suggest that you contact a knowledgeable and experienced bankruptcy attorney near you for advice. I wish you well.

Dan Nunley

If the Chapter 7 trustee has abandoned the bankruptcy estate’s interest in the motorcycle, then you can sell the motorcycle without any complication. The trustee would do this by filing a Report of No Distribution shortly after your Meeting of Creditors.

Dan Nunley

Thanks for your question. While your personal bankruptcy will wipe out the debt you owe on the car, your mom will still be liable to the finance company for the entire balance.

Dan Nunley

You are an excellent example of why it is almost always inadvisable to sign a reaffirmation agreement on a motor vehicle loan. As I am licensed to practice law only in Oklahoma and it appears that you live in California, I cannot give you legal advice. Your available options will depend on the specifics of your situation. I suggest that you seek legal advice from a knowledgeable attorney near you. I wish you well.

Dan Nunley

Luis Jerez