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Will You Lose Your Car?

Will I Lose My Car If I File for Bankruptcy?

Helping You Keep Your Vehicle in Bankruptcy

Having a car is essential for most Americans. When people are thinking about bankruptcy, one of their primary concerns is keeping their vehicle.

At RHM LAW LLP , we understand you need transportation to and from work, as well as for running errands and other purposes. That’s why our lawyers are dedicated to helping people filing Chapter 7 and Chapter 13 bankruptcy find the debt relief they need while retaining their cars.

For more detailed bankruptcy information tailored to your unique situation, call our office at (213) 344-0043 to schedule a free consultation.

When Can I Keep My Car During Bankruptcy?

Whether or not you can keep your vehicle during bankruptcy can depend on several factors:

  • Do you own the vehicle? If you own your vehicle, you generally do not have to worry about losing your car, as it is generally protected by exemptions. This is usually applicable to older vehicles with lower market values.
  • Is your vehicle covered by bankruptcy exemptions? If your vehicle's market value is lower than the exemption amount, your vehicle can be covered under the exemption, which protects it from being liquidated by the trustee.
  • Can you keep up with car payments if you financed or leased it? If you are still paying off a car, you have the option to catch up on past payments and reorganize the loan into more affordable monthly payments. If you cannot afford the monthly payments, you may need to consider surrendering the vehicle to the lender.

It might reassure you to know that most people who file bankruptcy are able to keep their car. In fact, in bankruptcy, oftentimes we are able to reduce a car’s value to fair market value and force the lender to accept the payments through a Chapter 13 bankruptcy repayment plan. As a result, your monthly car payments can be significantly reduced.

What Are the Motor Vehicle Bankruptcy Exemptions?

The Bankruptcy Code is designed to help debtors, not punish them. As such, bankruptcy law protects certain property classified as exemptions, including allowing a petitioner to retain a car as an exemption.

In California, the 704 Motor Vehicle Exemption (System 1) allows protection of up to $3,325 in equity.

The 703 Motor Vehicle Exemption under System 2 allows up to $5,850 of equity for cars.

What If My Car Is Being Repossessed? Can I Stop It?

If you are behind on your car payments, the lender has the right to repossess the vehicle. However, when you file either Chapter 7 or Chapter 13 bankruptcy, the court issues an automatic stay. This freezes all repossessions, giving you time to catch up on missed payments. Even if your car was recently repossessed, filing bankruptcy can help you get it back — and get it back fast.

If you file Chapter 7, you may be able to retain your car if you make timely payments. Under Chapter 13, you may be able to keep your vehicle by paying the creditor the value of the car rather than the full amount due on the debt.

We Are on Your Side

For answers to all your bankruptcy questions, including repossession and reaffirmation agreements, count on RHM LAW LLP . Our bankruptcy attorneys have helped thousands of clients overcome financial problems and get back on track.

Contact our firm to arrange a complimentary consultation with a bankruptcy professional who understands how important it is that you retain your vehicle.

From our offices in Los Angeles and Encino, we serve clients in Los Angeles, San Fernando Valley, Riverside, San Bernardino and Orange Counties. Payment plans are available.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

RHM LAW LLP

Meet Our Los Angeles Bankruptcy Specialists

Client Reviews

What Clients Say About Working With Us
    "Without the support of pro bono attorneys we couldn't do all the work we need to do, and your firm in particular is outstanding."

    Thank you for your great work on behalf of Ms. Johnson. Without the support of pro bono attorneys we couldn't do all the work we need to do, and your firm in particular is outstanding.

    - Skip K.
    "We are very happy that you were able to accomplish the modification of our loan in such a short period of time. Thank you again for your professional service."

    Dear Mr. Resnik: We wanted to thank you for your professional handling of our loan modification with GMAC mortgage. We are very happy that you were able to accomplish the modification of our loan in such a short period of time. Thank you again for your professional service.

    - W and B Mejia
    "I cannot thank them enough for helping save my home. I would recommend them for anyone that is thinking about filing for bankruptcy or foreclosure on their home."
    I needed a bankruptcy attorney in Sherman Oaks and found Matt Resnik on Google. He has one of the best-reviewed bankruptcy law firms on Yelp so I decided to check it out his law firm for myself. I quickly found out that they are foreclosure specialists and they could help me with my issue. They made the process very easy for me and laid out my options for me. I cannot thank them enough for helping save my home. I would recommend them for anyone that is thinking about filing for bankruptcy or foreclosure on their home. They are the best bankruptcy law firm in Sherman Oaks.
    - Joseph R.
    "I filed bankruptcy with this firm 3 years ago and found that they are professional, friendly, and compassionate."
    I filed bankruptcy with this firm 3 years ago and found that they are professional, friendly, and compassionate. I also met with their loan modification department. Unfortunately, they were unable to help because of the type of loan that I have. I really appreciated that they did not lie, waste my time, or take my money in an attempt to modify a loan that was not doable. I've since used their firm for a couple of minor issues and found all of the attorneys to be knowledgeable and considerate. Attorneys Simon and Resnik are amazing!
    - Shannon J.
    "Matt and his staff conducted themselves with professionalism throughout the whole ordeal."
    I worked with Matt and his team for about a year to get through the paperwork shuffle and my personal experience was nothing short of fantastic. Legal situations have a tendency to get hairy, but Matt and his staff conducted themselves with professionalism throughout the whole ordeal. To keep it short, let's just say he under-promised and over-delivered.  Rarely would I ever say this about an attorney, but overall he was just a great guy. I would not hesitate to have him on my side of the courtroom again. World market is right across the street from his office and I even decided to get his staff a thank you / holiday gift card.  World market has excellent craft beer BTW, try the Einstock White Ale. They also validate parking. That just shows this isn't a fake review.
    - Dean C.
    "Was very impressed with the comprehensive professionalism of the firm..."

    Was very impressed with the comprehensive professionalism of the firm, especially Matthew Resnik... I had suffered through the incompetence of two previous bk lawyers not to mention fees far greater than anticipated, without resolution. Having never gone through bk before, I did not realize how difficult it could be...then, my case was turned over to Mr. Resnik...almost immediately there was a marked positive difference. Where there was little to no communication, all of a sudden I am getting updates...regularly. Further, my case was finally discharged...yet, Mr. Resnik continues to communicate, offer assistance...and, has NEVER asked for additional fees, which I am sure he could have justified...much unlike the two previous attorneys with which I was dealing. I have no reservations, whatsoever, referring and recommending Matthew Resnik for any and all business or personal bk issues...or, other wise. I have no doubt that he will be transparent on helping you regardless of the problem. Good guy.. good firm... a wonderful experience!

    - G.L
    "He not only saved my house but also got rid of all my debt. They are not your typical attorneys and their creativity really allowed me to do things that other attorneys never mentioned in previous consults."
    Fantastic office! I want to thank Matt for taking his time with me and sincere in his assistance. He spent over an hour with me for free during our initial consult. I left knowing exactly what's needed. He not only saved my house but also got rid of all my debt. They are not your typical attorneys and their creativity really allowed me to do things that other attorneys never mentioned in previous consults. Affordable and Outstanding firm and thank you for all you have done! My family thanks you!
    - David K.
    "They were thorough, extremely knowledgeable, wonderful to deal with, thoughtful, and really helped guide me through what was one of the toughest times in my life."
    Matt and his team are the best!!  They were thorough, extremely knowledgeable, wonderful to deal with, thoughtful, and really helped guide me through what was one of the toughest times in my life. I never felt judged or looked down on. They were efficient and really were lifesavers during this tough time. I can not recommend them highly enough!!!!
    - Rusty H.
    "These are top-notch pros that'll have your back. I cannot recommend them highly enough."
    Where to begin? I had a vile evil credit union repo my car over a misunderstanding, they wouldn't work with me even when I offered full payment plus repo fees (this was my first repo!) so I didn't know what to do. I met with a few lawyers but when I met with Simon he broke things down and gave me my options. I needed a car - so I filed BK and included the car to get it back. The evil credit union fought and Simon GOT ME MY CAR BACK!!! His team is amazing!!!! Maria Donna etc!!! These are top-notch pros that'll have your back. I cannot recommend them highly enough. Sincerely they saved my life. LA with no car!? ARGH!!!!!! *THANX ALL!!!!
    - Tim C.

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