Filing for bankruptcy while keeping your car in Georgia requires understanding your legal options and taking specific steps to protect your asset. Whether filing under Chapter 7 or Chapter 13, exemptions, reaffirmation agreements, and repayment plans can help you retain your vehicle while seeking debt relief.

At Morgan & Morgan, we’ve helped countless Georgia residents navigate the bankruptcy process while protecting their most essential assets. With our extensive experience, we can guide you through this complex process to ensure your car remains in your possession while achieving financial relief.

 

Can You File for Bankruptcy and Keep Your Car in Georgia?

Yes, you can file for bankruptcy and keep your car in Georgia by using exemptions and legal protections. The specifics depend on your bankruptcy chapter and whether you can keep up with loan payments or protect the car’s equity.

 

 

What Are Georgia’s Car Exemptions in Bankruptcy?

Georgia allows you to exempt up to $5,000 of equity in your car under state bankruptcy laws. This means you can protect a vehicle with equity up to this amount from being sold to repay creditors in Chapter 7 cases.

Exemption Type	Details
Vehicle Exemption	Up to $5,000 of equity in one car
Wildcard Exemption (if unused)	Up to $1,200, which can be added to the vehicle exemption

 

How Does Chapter 7 Bankruptcy Affect Your Ability to Keep a Car?

In Chapter 7 bankruptcy, your car may be protected if:

• You Keep Payments Current: Staying up to date on loan payments helps prevent repossession.
• Equity is Covered by Exemptions: If your car’s equity falls within Georgia’s $5,000 exemption, you can retain it.
• Reaffirmation Agreements: By signing a reaffirmation agreement, you agree to continue making loan payments, keeping the car out of the bankruptcy estate.

 

How Does Chapter 13 Bankruptcy Protect Your Vehicle?

Chapter 13 bankruptcy allows you to keep your car by including it in a repayment plan. Here’s how:

1. Restructure Debt: Your car loan balance can be spread across your 3-5 year repayment plan.
2. Reduce Loan Principal (Cramdown): If your car is worth less than the loan balance and was purchased over 910 days before filing, you may reduce the balance owed.
3. Prevent Repossession: Filing for Chapter 13 immediately halts repossession efforts through an automatic stay.

 

What Is a Reaffirmation Agreement, and How Does It Work?

A reaffirmation agreement is a legal contract where you agree to continue paying your car loan during bankruptcy. This allows you to retain ownership of the vehicle. Key considerations include:

• You must sign the agreement before your discharge is complete.
• The lender can repossess your car if you default on payments after reaffirmation.
• Your attorney and the court must approve the agreement, ensuring it doesn’t impose an undue burden.

 

 

Can You Keep a Car That Is Paid Off in Bankruptcy?

Yes, you can keep a paid-off car during bankruptcy as long as its equity falls within Georgia’s $5,000 vehicle exemption. If the value exceeds the exemption, you may need to negotiate with the bankruptcy trustee to keep it.

 

Steps to File for Bankruptcy and Keep Your Car in Georgia

Follow these steps to protect your car while filing for bankruptcy in Georgia:

1. Determine Your Vehicle’s Equity: Calculate equity by subtracting the loan balance from the car’s market value.
2. Choose the Right Chapter: Select Chapter 7 for quick debt relief or Chapter 13 for long-term repayment while protecting your car.
3. List Exemptions: Use Georgia’s vehicle exemption to safeguard your car.
4. Stay Current on Payments: If financed, make all payments on time to avoid repossession.
5. Consult an Attorney: A bankruptcy attorney ensures your car and other assets are protected throughout the process.

 

Does Filing Bankruptcy Stop Car Repossession in Georgia?

Yes, filing for bankruptcy immediately stops car repossession through an automatic stay. This legal protection prevents lenders from seizing your vehicle while the case is active.

 

 

How Can You Reduce Your Car Loan Through Bankruptcy?

In Chapter 13 bankruptcy, you may qualify for a loan “cramdown.” A cramdown reduces your car loan balance to match the car’s current market value. This option is only available if:

• The car was purchased more than 910 days before filing.
• The current loan balance exceeds the vehicle’s value.

 

What Are Common Mistakes to Avoid When Filing Bankruptcy to Keep Your Car?

Avoid these mistakes to protect your car during bankruptcy:

• Missing Payments: Falling behind on car payments can result in repossession.
• Failing to Claim Exemptions: Forgetting to list exemptions may result in losing your car.
• Not Consulting an Attorney: Filing without legal guidance can lead to costly errors.

 

Contact Morgan & Morgan for Expert Bankruptcy Guidance

Protecting your car while filing for bankruptcy in Georgia can be complex, but Morgan & Morgan is here to help. With decades of experience helping clients safeguard their assets, we provide the personalized guidance you need for a successful case.

Call us today at 706-548-7070 or visit our contact page to schedule a free no-obligation consultation. Let us help you achieve financial relief while keeping your vehicle and essential assets protected.

 

Related Content:

• What Are the Pros and Cons of Declaring Bankruptcy in Georgia?
• Do You Have to Go to Court for Bankruptcies in Georgia?
• How Much Does a Bankruptcy Lawyer Cost in Georgia?
• How Do I File Chapter 7 with No Money in Georgia?

 

FAQs About Keeping Your Car in Bankruptcy

Can You Keep a Leased Car in Chapter 7 Bankruptcy?

Yes, you can keep a leased car in Chapter 7 if you assume the lease. By continuing to make payments and meeting lease terms, you retain possession of the vehicle.

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What Happens If You Miss a Car Payment During Bankruptcy?

Missing payments during bankruptcy may result in repossession. Staying current on payments or including the car loan in a Chapter 13 repayment plan can prevent this.

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Can You Switch from Chapter 7 to Chapter 13 to Keep Your Car?

Yes, switching from Chapter 7 to Chapter 13 is possible to protect your car. Chapter 13 allows you to restructure car payments, keeping your vehicle in the process.

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Is It Possible to File Bankruptcy Without Losing a Luxury Vehicle?

Keeping a luxury car during bankruptcy depends on its equity and your ability to cover payments. Chapter 13 may offer better protection for high-value vehicles.

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What Happens to Co-Signers on a Car Loan in Bankruptcy?

Co-signers remain liable for the debt if you include the car loan in bankruptcy. Protect them by reaffirming the loan or continuing payments.

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Does Georgia Allow Federal Bankruptcy Exemptions for Cars?

No, Georgia uses state-specific exemptions for vehicles. The state exemption allows up to $5,000 in equity protection.

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Can I Buy a New Car After Filing for Bankruptcy?

Yes, you can buy a new car after bankruptcy, but lenders may offer higher interest rates. Rebuilding your credit improves loan terms over time.