Most Oregonians who file bankruptcy rely on their cars and trucks to go to work, get to the doctor, to drive children to school, and for many other purposes. When you need to file bankruptcy, protecting a vehicle is an important issue to consider. If you file a Chapter 7 bankruptcy case and the equity you have in your vehicle is at or below the exemption provided for by Oregon law, you will be able to keep the vehicle. Talking to an attorney can be helpful in determining the value of your vehicle and understanding the exemption limit. If you have a loan against the vehicle, things become a bit more complicated. Some lenders will require that you sign a reaffirmation agreement in order to keep the vehicle and the vehicle loan. This means that you will remain responsible for the debt against the vehicle, even after the chapter 7 bankruptcy case. Not all lenders require that you sign a reaffirmation agreement. It is important that you consider your alternatives and consult a bankruptcy attorney before you decide to sign a reaffirmation agreement.
If your vehicle is worth more than the Oregon bankruptcy exemptions allow, there are some bankruptcy options you may want to consider. In some cases, you can enter into an agreement with a bankruptcy trustee to allow you to make payments in order to keep your vehicle. In other cases, you may consider filing a Chapter 13 bankruptcy case. In a Chapter 13 bankruptcy case, you are allowed between 3 and 5 years to pay a portion of your unsecured debts in exchange for being permitted to keep your vehicle and your other valuable belongings.
It is never a good idea to give away a vehicle or to sell it for less than it is worth before filing a bankruptcy case. If you do so, you risk losing the vehicle and possibly the opportunity to discharge your debts in bankruptcy.
The bottom line is that when you have something valuable like a vehicle that you need to keep and you need bankruptcy to relieve you of your debt obligations, it is important to consult a bankruptcy attorney to discuss your options.