How Long Can I Keep My Automobile If I Surrender It in Bankruptcy?


How long can I keep my automobile or car if I intend to surrender it in Bankruptcy?  Thank you to Mark Zadar of Clearwater, Florida for your question.  This is a common question asked by the Clients that come to our offices.  Sometimes, a person filing Bankruptcy will determine that it is in his or her best interest to surrender their automobile in the Bankruptcy.

Generally, if you surrender your automobile in the Bankruptcy, such surrender of the collateral or automobile, is in Full Satisfaction of the Debt.  A Bankruptcy Filer may determine that it is better to surrender the Automobile in the Bankruptcy for a variety of reasons.

Upon filing Bankruptcy, such a Debtor does not necessarily have to surrender the Automobile immediately.  It could be a period of one to up to four or five months before the Lienholder takes possession of the Automobile.  Especially for a Debtor on a limited budget, this may give the Debtor an opportunity to save monies before surrendering the Collateral.  Such monies may then be used either to purchase an Automobile for Cash, with no Lienholder, or to use as a down payment on another Automobile, subject to a Loan or Lien.

Mark of Clearwater, Florida, thank you for your question.  Here is a short Video we made that addresses the issue of surrendering an Automobile in a Bankruptcy.