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Can keep you can keep your car and house in Chapter 7?
Yes! Lets break it down
Can You Keep Your House and Car in Bankruptcy?
YES — in both Chapter 7 and Chapter 13, most people keep:
• their house
• their car
• their personal property
The rules are different depending on the chapter, but the outcome is usually the same:
You keep what matters most.
Let’s break it down.
KEEPING YOUR HOUSE & CAR IN A CHAPTER 7 BANKRUPTCY
Chapter 7 is a fresh start bankruptcy.
People worry they will lose everything — but that’s not how it works.
✔ Most people keep their house
✔ Most people keep their car
✔ Most people keep all their property
You keep secured property in Chapter 7 by using something called a:
Reaffirmation Agreement
A reaffirmation agreement means:
• you stay bound to the original loan
• you keep making payments
• you choose NOT to discharge that specific debt
If you’re current on payments and your equity is within Michigan’s exemption limits, you can keep the property.
Chapter 7 Equity Limits
To reaffirm:
• House: You can protect up to $28,000 in equity if single
• Car: Usually not a problem — Michigan exemptions are generous
You must also:
• be current on payments
• have insurance
• disclose ALL debts (even ones you want to keep)
✔ If you want to keep the property, make your payments on time.
KEEPING YOUR HOUSE & CAR IN A CHAPTER 13 BANKRUPTCY
Chapter 13 is a reorganization bankruptcy.
It is the BEST chapter for protecting property.
✔ Chapter 13 stops foreclosure
✔ Chapter 13 stops repossession
✔ Chapter 13 lets you catch up on missed payments
✔ Chapter 13 can reduce what you owe on certain debts
✔ Chapter 13 can eliminate a second mortgage (lien strip)
If you’re behind on your house or car, Chapter 13 is often the only way to keep them.
How Chapter 13 Protects Your House
Chapter 13 allows you to:
• stop foreclosure immediately
• catch up on missed mortgage payments over 3–5 years
• keep your home even if you’re behind
If your home is underwater, you may even qualify for:
Lien Stripping
This can wipe out a second mortgage or HELOC if the first mortgage is higher than the value of the home.
This is common in:
• Howell
• Brighton
• White Lake
• Hartland
• Waterford
How Chapter 13 Protects Your Car
Chapter 13 can:
• stop repossession
• force the lender to return a repossessed car (if done quickly)
• reduce the interest rate
• sometimes reduce the balance owed (cramdown)
If you’re behind on car payments, Chapter 13 is often the best solution.
Chapter 7 vs Chapter 13 — Which One Protects You Better?
Choose Chapter 7 if:
• you’re current on your house and car
• your equity is within exemption limits
• you want a fast fresh start
• you want to reaffirm and keep the property
Choose Chapter 13 if:
• you’re behind on payments
• you’re facing foreclosure
• you’re facing repossession
• you have too much equity
• you want to strip a second mortgage
• you need time to catch up
If you’re not sure which chapter protects you best, call me. I’ll tell you in 5 minutes.
248-882-0838
Disadvantages of Reaffirming Debt
Reaffirming is not always the best choice.
❌ You’re locked into the loan
❌ You must keep paying
❌ You can’t discharge it later
❌ Mortgage payments may not show as good credit
Sometimes it’s smarter to:
• reaffirm the car
• NOT reaffirm the mortgage
• or file Chapter 13 instead
I’ll tell you what’s best for your situation.
Call Me with Questions
248‑882‑0838
Call, text, or email: dddern@aol.com
I’ll explain:
• whether you should reaffirm
• whether you should NOT reaffirm
• whether Chapter 7 or Chapter 13 protects you better
• how to keep your house and car safely
Free Consultation
Consultations are always free at the Law Office of Doug Dern.
I’m a debt relief agency. I help people file for bankruptcy under the United States Bankruptcy Code.
If you live in:
• Brighton
• Howell
• Hartland
• White Lake
• Waterford
• Fenton
• Milford
…you can keep your house and car in both Chapter 7 and Chapter 13 — and I’ll show you how.