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Vehicles and Ohio Bankruptcy Laws



What Happens To My Car if I File Bankruptcy in Ohio


In chapter 7 cases, you have the option to surrender your vehicle, to redeem your vehicle, or to reaffirm your vehicle loan. In chapter 13 cases, the debtor is allowed to keep his or her vehicle if the secured debt (e.g. the vehicle loan) is paid as part of the chapter 13 plan. Additional exemptions may help owners to keep vehicles owned outright.


In order to keep your vehicle(s) in a chapter 7 bankruptcy, we must analyze the number of vehicles you own, the current value of each vehicle, whether there are vehicle loans present and the outstanding balances of these vehicle loans. In order to reaffirm a vehicle loan in a chapter 7 bankruptcy, you also must be current on the vehicle loan at the time of filing the bankruptcy.


If you are considering filing for chapter 7 or chapter 13 bankruptcy in Columbus, Ohio, Attorney Ken Sheppard, Jr. is here to help

Vehicle Loan Reaffirmation

Reaffirmation is an agreement between a debtor and a creditor where the debtor may keep a secured asset after the bankruptcy case has concluded as long as the debtor agrees to continue making the secured loan payments. The terms of the secured loan at the time of the bankruptcy filing continue to exist after the bankruptcy is closed. If the debtor defaults on the reaffirmed secured loan after the bankruptcy has concluded, the creditor retains all rights to pursue the debtor for the default and the debtor remains personally liable for the secured loan. Simply stated, reaffirmation agreements favor creditors, not debtors. If a reaffirmation agreement is not executed, then the debtor in most circumstances may continue to keep the vehicle as long as the loan payments remain current. However, there are a few creditors who will nonetheless repossess the vehicle if a reaffirmation agreement is not executed.


Fully Owned Vehicles

Many of our clients who file for bankruptcy own car(s) and/or truck(s) and they are permitted to keep them during the bankruptcy proceeding and of course through Ohio Vehicle and Wildcard exemptions they often qualify to keep them after the bankruptcy case is closed. Experienced Columbus, Ohio Bankruptcy Attorney Ken Sheppard can explain how your vehicles will be treated in either type of bankruptcy.

Read More About Fully Owned Vehicles >>


Preventing Car Repossession

At the time of filing your bankruptcy case, if you are not current on your vehicle loan and you wish to keep it, you cannot file a chapter 7 bankruptcy. Your recourse will be to get current, consider the redemption option, or file a chapter 13 bankruptcy instead. The fear of repossession of your vehicle is eliminated once you file for chapter 7 or chapter 13 bankruptcy. If you are behind on your vehicle loan payments, it doesn't take very long (1-2 months if not a shorter duration) before a creditor may seek to repossess your vehicle. At the time you file for bankruptcy, the automatic stay provision takes effect and creditors are then forbidden from collecting (e.g. repossessing) your vehicle. The Columbus Bankruptcy Lawyers at Sheppard Law can share with you how Ohio and Federal Exemptions are applicable to protecting the equity in your vehicle. In chapter 7 bankruptcy, the Chapter 7 Trustee's duty is to seek the liquidation of non-exempt assets to pay unsecured creditors. Bankruptcy Attorney Ken Sheppard can help you understand your options involving your car, truck, atv, motorcycle, RV, boat, etc.

Read More About Stopping Repossession >>


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Sheppard Law Offices - Columbus

Sheppard Law Offices

The Columbus, Ohio bankruptcy debt relief and taxation law office of Sheppard Law Offices, LPA is conveniently located just inside I-270 off of Cleveland Ave. Our offices provide a short drive from throughout Central Ohio including counties of Franklin, Delaware, Knox, Marion, Licking, & Fairfield. We regularly serve  Debt  & Tax needs of clients from  Columbus, Westerville, Bexley, Dublin, Sunbury, Delaware, Fredericktown, Johnstown, Centerberg, New Albany, Gahanna, Pickerington, Grandview, Upper Arlington, Clintonville, Groveport, Pickerington, Pataskala, Reynoldsburg, Groveport, Lewis Center, Worthington, Granville, the Short North, Hilliard, Plain City, Grove City, Newark, Mt. Vernon, Canal Winchester, and Lancaster.

Columbus Ohio Office

2600 Tiller Lane, Suite A

Columbus, Ohio 43231

Telephone: (614) 523-3106

Newark, Ohio Office

843 N. 21st Street, Suite 108

Newark, Ohio 43055

Telephone: (740) 345-7138

Akron-Canton Office

Belden Village Tower, 200

Canton, Ohio 44718

Telephone: (330) 409-2876

Mt. Vernon, Ohio Office

11 West Gambier Street

Mt. Vernon, Ohio 43050

Telephone: (740) 392-0404

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