Oklahoma Bankruptcy HelpCan I Keep My Car When Filing Chapter 7 in Oklahoma?

A common question for people contemplating a bankruptcy filing is whether they can keep their cars after filing Chapter 7 in Oklahoma. There is no one-size-fits all answer to the question. There is not always an easy or formulaic answer when it comes to any bankruptcy laws in Tulsa, Oklahoma.

Once you file for bankruptcy, you will have to take a hard look at your finances and how much you are paying monthly. A car loan could be one of those monthly obligations.

If so, you may have to make a choice about whether to keep the loan, especially when filing Chapter 7 in Oklahoma.

FAQ: Filing Chapter 7 in Oklahoma

The good news is you have rights while filing Chapter 7 in Oklahoma. Even if you are late on your payments, bankruptcy will give you some time to get your affairs in order.

No creditor, including the bank holding your car loan, can legally take any collection action against you after you declare Chapter 7, until the proceeding is complete or a court approves interim action. This includes repossession.

However, remember bankruptcy is never a free pass to keep property and not repay the remainder of the loan.

Consider Downsizing

If you’ve been driving a newer-model car for the past couple of years, it may be time to consider whether downsizing is a better option.

You might want to get a less expensive car in the meantime, and work towards purchasing an upgraded car in the future.

Redeem Your Vehicle

Another option you have is to redeem your vehicle from your car loan company. This means that you might be able to pay what your car is currently worth, instead of what you owe.

For example, if you owe $17,000 on your car, but it is only currently worth $10,000, you may be able to make a single cash payment and pay off your car for much less than what you owe on it.

However, this is only an option if you have the available cash to pay of your car in a lump sum, and your creditor agrees. Since most people filing for bankruptcy in Oklahoma don’t have this kind of money, you may be able to obtain a vehicle redemption loan at a much lower interest rate than you currently pay.

Reaffirm Your Loan

Even after you’ve defaulted on your car loan, you may be able to reaffirm your loan with your car loan company. This means that they will continue to allow you to make payments on your car, so it can remain in your possession.

Exercise Your Motor Vehicle Exemption

In Oklahoma, you are entitled to discharge $7,500 worth of debt on your vehicle. If your car is worth $7,500 or less, then you will owe nothing on your car. If it is worth more, then you will owe the difference.

However, if you cannot make the payments on the difference, your car will be sold and you will receive any proceeds from that sale.

Initial Strategy Session: Tulsa Bankruptcy Lawyer

To determine if you can keep your car after filing Chapter 7 in Oklahoma, contact a Tulsa bankruptcy attorney at the Freedom Financial Bankruptcy Lawyers of Tulsa as soon as possible. We can quickly assess the best course of action you can take in order to stay mobile.

To receive your low-cost initial bankruptcy analysis, call the Freedom Financial Bankruptcy Lawyers of Tulsa today at (918) 786-9600.