Title: Will I Lose My Car If I File Bankruptcy? What Tampa Residents Should Know

When you're considering bankruptcy, one of the most pressing concerns is often: Will I lose my car? For many people, a vehicle isn’t just a convenience — it’s essential for work, family, and daily life. At Mosakowski Law, PA, we help clients in Tampa and throughout Florida understand how bankruptcy works, including how it affects your car.

In this article, we’ll explain:

• How secured debts (like car loans) interact with bankruptcy

• What exemptions are available in Florida

• Differences between Chapter 7 and Chapter 13

• Options like reaffirmation, redemption, or surrender

• Key steps you should take to protect your vehicle

Understanding the Basics: Secured Debt & Lien Rights

First, it’s critical to understand that a car loan is a secured debt. The lender holds a lien on your vehicle, meaning it has the legal right to repossess it if you fail to make payments. Even in bankruptcy, that lien typically remains intact unless you take certain steps to address it.

Filing bankruptcy does trigger an automatic stay — a court order that temporarily halts most collection actions, including repossession. Fleysher Law However, that protection is not permanent, and whether you ultimately keep your car depends on your specific situation.

In short: filing for bankruptcy does not automatically mean you lose your car, but in some cases the vehicle may be at risk unless proper strategies are used.

Florida’s Motor Vehicle Exemptions

Each state has its own rules on how much of your property (including vehicles) you can protect via exemptions in bankruptcy. Florida’s laws are somewhat modest when it comes to vehicle equity. gattolaw.com+3miamibankruptcy.com+3Clare Casas+3

• Florida allows a motor vehicle exemption of $1,000 in equity for an individual filer, or $2,000 for joint filers. gattolaw.com+3miamibankruptcy.com+3Clare Casas+3

• In addition, Florida provides wildcard or personal property exemptions that can sometimes be applied to protect additional value, but these rules are complex and may be limited depending on whether you’re using your homestead exemption. miamibankruptcy.com+3Clare Casas+3jacksonvillebankruptcylawyerblog.com+3

What does “equity” mean? It’s the difference between:

• The fair market value of your vehicle, and

• The amount you still owe on the car loan

If your car is worth $8,000 and you owe $7,500, your equity is $500 — under Florida’s $1,000 exemption, that would be fully protected. But if your equity exceeds $1,000 (or the combined exemptions you can use), the bankruptcy trustee may require that excess to be paid or could take steps to sell it. beaconlawpa+5Nolo+5Clare Casas+5

Chapter 7 vs. Chapter 13: What’s the Difference?

Chapter 7 (Liquidation)

Under Chapter 7, nonexempt assets may be sold by the bankruptcy trustee to pay creditors. If your car has more equity than your exemptions allow (i.e., “nonexempt equity”), the trustee might sell it. jacksonvillebankruptcylawyerblog.com+3Nolo+3beaconlawpa+3

But if your equity is low enough, or fully exempt, you can likely keep the vehicle. In addition, if you have a car loan and stay current on payments, you may be able to reaffirm the loan (i.e. agree to continue paying it) so you can keep the car. gattolaw.com+3Nolo+3Fleysher Law+3

If your payments are behind, filing Chapter 7 won’t eliminate the loan unless you surrender the car (i.e., give it back). Fleysher Law+2gattolaw.com+2

Chapter 13 (Reorganization)

Chapter 13 operates under a repayment plan (usually 3 to 5 years). Because you repay some or all of your debts over time, it often gives more flexibility to keep your car even if you have more equity or past-due payments. Fleysher Law+1

If you're behind on car payments, Chapter 13 may allow you to catch up through the plan while still keeping the car under court protection.

Options for Keeping Your Car

If you want to keep your vehicle despite filing bankruptcy, here are key tools to consider:

1. Reaffirmation Agreement

You can enter into an agreement with your lender to continue paying your car loan under its original or modified terms, even after bankruptcy. This can help you keep the vehicle, as long as you stick to the payments. However, this also means you remain liable on the debt. Fleysher Law+2Nolo+2

2. Redemption

Under certain circumstances, you may pay the lender a lump sum equal to the current value of the vehicle (as determined by the court or appraisal). This can let you “buy out” the lien and keep the car. Redemption is more rare but is an option in some cases. Nolo+1

3. Surrender

If keeping the car is not feasible (excessive equity, unaffordable payments), you can surrender the vehicle. Doing so voluntarily may reduce additional repossession costs. But even surrender doesn’t always relieve you of a deficiency balance (the remaining loan amount after sale). Upsolve Backup+2Fleysher Law+2

4. Trustee Buy‑Back or Negotiation

In some situations, if a trustee would sell the car, they may allow you to “buy back” the car at a discount or allow you to make payments over time. This is a negotiation more often seen in unique situations. jacksonvillebankruptcylawyerblog.com+1

What You Should Do (Steps to Protect Your Car)

1. Get a professional appraisal or valuation of your car to determine fair market value.

2. Calculate your equity (value minus outstanding loan).

3. Assess which exemptions you can use (motor vehicle exemption, wildcard, etc.).

4. Decide whether you can keep making loan payments or catch up on arrears.

5. Based on your equity, loan status, and budget, choose between Chapter 7 and Chapter 13.

6. If appropriate, reaffirm or redeem.

7. Work with an experienced bankruptcy attorney who knows Florida law (like Mosakowski Law) to strategize.

   
   

Why You Need an Experienced Bankruptcy Attorney

Bankruptcy law and exemption rules are complex, and every case is different. What applies to one client might not apply to another — especially in Florida, where exemption rules can be restrictive. A mistake in valuing your vehicle or applying exemptions could result in losing your car or being required to pay more than you expected.

At Mosakowski Law, PA, we help clients in Tampa and throughout Florida navigate these complexities. We’ll evaluate your car, your debts, your income, and your goals (keeping the vehicle vs. restructuring) — and recommend the best bankruptcy path for you.

Final Thoughts: Will You Lose Your Car?

The bottom line is: You might not lose your car, but it depends on:

• how much equity you have in it,

• whether you can continue payments (or catch up),

• which bankruptcy chapter you file, and

• whether you use the right legal strategies (reaffirmation, redemption, etc.).

If keeping your car is essential, you need strong legal advice from the start. If you’re in Tampa or somewhere in Florida and considering bankruptcy, contact Mosakowski Law, PA for a consultation — we’ll help you understand your rights and protect what matters most.

Learn more about Chapter 7 Bankruptcy here.