Keeping Your Car in St. Louis Bankruptcy

Most people can keep their vehicle when filing bankruptcy. Here is how it works in Missouri.

Missouri Vehicle Exemption

Exemption amount: $3,000

The exemption protects your equity in the vehicle -- the difference between what the car is worth and what you owe on it.

Options in Chapter 7

1. Reaffirmation

Sign a reaffirmation agreement with your lender to keep paying the loan. You keep the car but remain personally liable for the debt.

2. Redemption

Pay the lender the car's current market value in a lump sum, even if you owe more. This requires court approval.

3. Surrender

Give the car back. The remaining loan balance is discharged.

Options in Chapter 13

Chapter 13 offers powerful car-saving tools:

  • Catch up on missed payments through your repayment plan
  • Cramdown: If you have owned the car for more than 910 days, you may be able to reduce the loan balance to the car's current value
  • Lower interest rate -- The court may reduce your rate to the prime rate plus a risk adjustment

Frequently Asked Questions

What if I owe more than my car is worth?

In Chapter 7, you can reaffirm the full loan or redeem at market value. In Chapter 13, cramdown may reduce the balance to market value if you have owned it over 910 days.

Can the lender repossess during bankruptcy?

No. The automatic stay prevents repossession. If you are behind on payments, Chapter 13 lets you catch up through your plan.

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