Legal Question in Bankruptcy in California

Chapter 7 - What happens to the car?

I am looking into filing Chapter 7 bankruptcy, but I am unsure of what will happen to a car that was partially financed in my name. About 4 years ago, I financed a vehicle in my name and my boyfriend co-signed. This was the best way to get the lowest interest rate for him. I have never driven the vehicle and have never made any of the payments, as it is my boyfriend's car. I believe that there is about $2,000 equity in the vehicle. Will they take the car away? What would be the best way to handle this?


Asked on 8/17/08, 2:34 pm

1 Answer from Attorneys
Brian Whitaker Lifeline Legal, LLP

Re: Chapter 7 - What happens to the car?

You have a vehicle exemption which will more than cover the $2,000 equity so the bankruptcy Trustee will NOT take the car. Whether the auto lender will take the car depends on whether the payments are kept up. In any case, you will be discharged of any responsibility on that car loan ... which is a good thing. Your boyfriend will continue to be responsible on the loan.

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Answered on 8/17/08, 6:33 pm


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