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Jul 2012

After bankruptcy: Changed my mind. Can I still give back the car?

Posted by / in After Bankruptcy / 8 comments

I get a question like this a couple times a week.

 My name is Ben Chambers.

You handled my bankruptcy about 8 months ago it went well–thank you very much.  I just have a quick legal question.

At the time I decided to keep a car my Kia Sorento 2005 and pay the monthly loan amount.

Now I found a cheaper car that I can buy and not be stuck with the payment.

If I stop paying the Kia will they repo the car and if they do will I be in trouble again ? I am in a very good way to reestablish my credit by following your advice.

Please help me with the Kia matter.  Thank you again for everything.

In the first year or so after bankruptcy, many people ask me if they can still give back the car.  They planned to keep it when they filed bankruptcy, but now it doesn’t make sense.    Sometimes because of a mechanical problem.  Some people, like  Ben Chambers (not his real name), are able to buy a junker for cash and want to get rid of the one with a payment.

After bankruptcy, sometimes that car you planned to keep gets big repairs bills. Can you change your mind and "include" it in the bankruptcy?

The good news is that it’s ok to do that.  The bankruptcy still protects you.   If you stop paying, they can come and repossess it, but they cannot get any money from you.

They also cannot legally put a repossession on your credit.   Your credit shows the bankruptcy and nothing after that.   Your credit does not show if you do pay after the bankruptcy, it does not show if you don’t pay.    (It’s a good idea, however, to check your credit and make sure.)

There’s an exception–that’s if you reaffirm the debt during the bankruptcy.  If you reaffirm, then you take the debt completely out of the bankruptcy, and you can’t change your mind down the road.  I hate it when people do that.

Why do people reaffirm?  Well, in Virginia (not all states) Ford Motor Credit will repossess–even if you are CURRENT–if you don’t reaffirm.  I’d like to tell Ford to eat steel, but some people really need that car and do reaffirm.

Some people reaffirm to work out a settlement with their credit union.  Credit unions do something that’s illegal for banks.  Credit Unions get you to sign in small print that the credit card is also attached to your car loan.  When people have a good car loan, and a good car, sometimes I’ll suggest they reaffirm just the car loan part–and the credit union agrees they won’t come after the car for the credit card.

Usually, reaffirming is a mistake.  I get about a dozen reaffirmation requests sent to me each month from car finance companies that do NOT repossess current cars.  I tell my clients up front that we’re throwing them in the trash.


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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

  • Bonnie

    October 5, 2016, am31 9:24 AM

    I have a car that is within a bankruptsy chapt 13 but my son is paying the note, so bankruptsy just is around it. The motor is going out he needs a different car what do i do? He cant make two payments

    • Robert Weed

      Robert Weed

      October 5, 2016, am31 11:50 AM


      Not sure what is going on here. you are in Chapter 13? You have a car loan on a car your son is driving? Your son now needs a new car? Don’t know what his situation is, but sounds like he needs to get a car? There must be more here I don’t understand–do you think you need to keep financing a car for your son? Why?

  • Harry

    October 10, 2016, pm31 2:53 PM

    Even though I filed for Chapter 7 in North Carolina, I have come to enjoy your blog! I do want to make a comment about keeping the car without reaffirmation. My payments are current and always have been. My attorney told me that my two creditors were fine with “retain and pay”. I was a little nervous about that concept, thinking these lenders would just wait until my discharge was final, and then pounce…I’d wake up one morning and find my cars gone! He said that’s not how it works. Anyway, I called both creditors and they both confirmed over the phone what my attorney said – if the payments are kept current they will not move to repossess post-discharge. In fact, neither lender even bothered sending reaffirmation agreements to my attorney! The lenders are TD Bank and NMAC by the way. So…I guess the questions is now…if I can change my mind and give the cars back without consequence at a point in the future, can they change their minds and repossess the cars in the future? Ever heard of a lender that allowed “retain and pay” at first changing their mind later and repossessing, due strictly to lack of reaffirmation way back when?

    • Robert Weed

      Robert Weed

      October 10, 2016, pm31 3:22 PM


      I’m glad that your lawyer and I have given you the same advice. Yes, they could change their minds at any time and come get the car; but no, I’ve never seen them do it as long as you don’t get late.

  • Cory Jones

    April 12, 2017, pm30 4:24 PM

    Hi Robert,

    I was recently discharged for a chapter 7 bankruptcy. I decided to keep my car, which is cosigned by my brother (actually a co-applicant). However, I’m thinking about giving the car back and purchasing something cheaper. My question is if I do so, how will this effect my brother, who has not filed for bankruptcy? Would it go on his credit as a repossession?

    • Robert Weed

      Robert Weed

      April 13, 2017, am30 7:19 AM


      Yes, it would.

  • Stephen

    September 4, 2017, pm30 8:43 PM

    Hi Robert,

    Would the same apply to a car lease? I reaffirmed my car lease in my chapter 7 bankruptcy that was discharged back in March, but now I have a chance to get into something much cheaper. I have been making the payments on time since then, but can I either stop paying or take it back to the dealership and still be protected by the bankruptcy?

    • Robert Weed

      Robert Weed

      September 5, 2017, am30 10:26 AM


      NOT if you REAFFIRMED the lease. If you reaffirmed, you are stuck.

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