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Can I Keep My House & Car If I File for Bankruptcy?

Christopher J. Kane, P.C. March 14, 2023

Judge Gavel, Financial Documents, Calculator on Dark Wooden BackgroundFiling for bankruptcy is an important decision that can have far-reaching consequences on your financial future. One of the main concerns many people have when considering filing for bankruptcy is whether or not they will be able to keep their house and car. The answer to this question depends on which type of bankruptcy you file for as well as other factors.  

Generally speaking, it is possible to keep your house and car if you file for bankruptcy. However, each case is unique, which is why you’ll want to discuss your situation with an experienced bankruptcy attorney before filing. Attorney Christopher J. Kane can examine the facts of your case and explain whether or not you need to worry about losing your house and car after filing for bankruptcy. With an office in Portland, Oregon, Attorney Christopher J. Kane serves clients throughout the state, including Columbia, Washington, Yamhill, and Clackamas Counties. Set up a one-on-one consultation today.  

Chapter 13 Bankruptcy  

Chapter 13 bankruptcy is a form of repayment plan that allows individuals to pay off their debts over the course of three to five years. Under this chapter of bankruptcy, you propose a payment plan in which you pay back some or all of the debt you owe over an agreed-upon period of time. In order to file for Chapter 13 bankruptcy, you must have a regular source of income and must not have secured and unsecured debt that exceeds a specific amount.  

In most cases, it is possible to keep your house and car when filing for Chapter 13 bankruptcy. Since these items are typically considered secured debts, they must be paid off during the course of the repayment plan.  

This means that if you are behind on payments or owe more than what the property is worth (in case of foreclosure), then you may be able to make up those payments over time while still living in your home or driving your car. The creditors will also receive regular payments from which they can draw funds to cover any missed payments on the loan.  

When it comes to keeping your house and car when filing for Chapter 13 bankruptcy, there are other factors to consider beyond just paying off the loan balance owed. For example, if you do not keep up with monthly payments as part of your repayment plan or if you accumulate new debt during this period that cannot be discharged by filing for bankruptcy, then the court may change your Chapter 13 case to Chapter 7 and require that these items be sold as part of liquidation procedures. However, these situations are rare.  

Chapter 7 Bankruptcy  

When filing for Chapter 7 bankruptcy—which involves liquidating some assets in order to pay off creditors—it is possible to keep both your house and car, but it will depend on how much equity you have in each asset and whether or not you are current on all payments.  

If you own your home—and that includes condos and townhomes—you may be able to keep it if you file for Chapter 7 bankruptcy. Generally, your house must meet the homestead exemption requirements for you to be able to keep it. In Oregon, the homestead exemption threshold is $40,000 for single owners or $50,000 for joint owners.  

However, it’s important to note that even if you do keep your home during bankruptcy, it does not mean that all associated obligations are erased. Any mortgage payments or other debts associated with the property must still be paid in full.  

If you do not have any equity in your house or car, or if you are behind on payments, then those assets may be sold in order to satisfy creditors’ debts. In general, however, debtors lose property after filing for bankruptcy under Chapter 7 in rare circumstances. As long as you are current on your payments, you will most likely be able to keep your house and car.  

Hiring an Experienced Bankruptcy Attorney  

Filing for bankruptcy can be a complicated process and there are several factors that need to be taken into consideration when determining whether or not one should file, especially if you fear that you could lose your house and car after filing for bankruptcy.  

For this reason, it’s best practice to consult with an experienced attorney who focuses on bankruptcy law before making any decisions about filing. An attorney can provide legal advice regarding the pros and cons of filing, explain what will happen to your house and car after you file, as well as help ensure that all applicable laws are followed throughout the duration of the case. Your attorney will help you navigate the bankruptcy process from start to finish and ensure that your case goes as smoothly as possible. Above all, a skilled lawyer fully understands that each case is unique and requires individual attention, and will provide this attention. 

Seek Skilled Representation  

Filing for bankruptcy can provide relief from debt while allowing individuals an opportunity to rebuild their financial situation. But what happens to your house and car if you file for bankruptcy? That depends on the facts of your case. Contact Attorney Christopher J. Kane to discuss your unique situation and determine whether or not you will be able to keep your house, car, and other property after filing for bankruptcy. Reach out today to schedule a free case review.