Keeping a car you are paying on?

What is the name of your state? Ca

We are seriously considering filing chapter 7; however we only have one car in the family (and 3 kids) We are currently paying still on this car. Does anyone know what would happen to the car? Would we have to give it up even though it is our only transportation?

TIA

Ask your bankruptcy lawyer (if you file) about "reaffirming" your car loan. Basically, it's a renewed promise to pay.

[Elmo-1]

Whether you're able to keep your car in Ch 7 depends on how much equity you have in it. Under System 2 Ca exemptions you're allowed $2,400 for your vehicle equity, System 1 is $1,900. Anything over that you'd have to pay the trustee the difference. In Ch 7 you'll need to be current on your payments to keep from the car from being reposessed.

In Ca you don't have to reaffirm to keep your car as long as you keep up with your payments. Reaffirmation doesn't stop the creditor from doing anything - it only stops you from being able to give up the car debt-free post-bk should you default. If you default, the bank will reposess. NEVER reaffirm a debt when the value of the collateral is less than the loan amount and never reaffirm when you don't have to.

Great information, thank you very much