Personal Loans in Bankruptcy

Banks, credit unions, and online lenders issue installment loans. If there is no collateral, the debt is usually unsecured. If the lender took the car title or a household-goods lien, treat it as secured — see car and property. A co-signer is not automatically protected — see co-signers. Chapter 13 has a limited extra stay for some co-signed consumer debts.

Co-signers

Frequently asked questions

Related resources

• Can I Keep My Car If I File Bankruptcy? — Can I Keep My Car If I File Bankruptcy?

  Keeping a vehicle generally requires enough exemption protection for the debtor’s equity and a legally workable approach to the lender’s lien. The applicable exemption law may depend on domicile history. Chapter 7 options can include reaffirmation, redemption when available, or surrender. Chapter 13 may allow arrears to be addressed through a plan and, in qualifying cases, different treatment of the secured claim.

• Credit Card Debt and Bankruptcy — Credit Card Debt and Bankruptcy

  Credit-card balances are usually unsecured and are often dischargeable in bankruptcy. Recent luxury purchases, cash advances, or debts allegedly obtained through fraud can create dischargeability issues under § 523. Timing and the circumstances of recent charges can matter.

• Deficiency Balances After Repossession — Deficiency Balances After Repossession

  After an ordinary secured vehicle loan is repossessed and the collateral is sold, a deficiency may remain if the amount legally owed exceeds the sale proceeds and allowable charges. A qualifying deficiency is generally treated as unsecured debt in bankruptcy. State-law notice, disposition, and commercial-reasonableness requirements can affect whether and how much of a deficiency may be collected.

• Payday Loans and Title Loans in Bankruptcy — Payday Loans and Title Loans in Bankruptcy

  An ordinary payday or deferred-presentment loan with no collateral is generally an unsecured claim and may be dischargeable. A vehicle-title loan or title-pawn transaction is different because rights in the vehicle depend on the contract, state law, bankruptcy law, and the timing of any default, repossession, forfeiture, or disposition.

• What Happens to a Co-Signer If I File Bankruptcy? — What Happens to a Co-Signer If I File Bankruptcy?

  Your bankruptcy discharge generally affects your personal liability; it does not automatically release a co-signer or guarantor. Chapter 13 provides a limited co-debtor stay for certain consumer debts, although a creditor may obtain relief from that stay in circumstances described by § 1301. A married couple may sometimes file a joint bankruptcy case. A parent, adult child, friend, or other non-spouse co-signer cannot simply be added to your joint petition and must evaluate their own legal options separately.