In the situation between you and the auto lender, the bank’s security interest on the vehicle survives the bankruptcy case. For example, you cannot file Chapter 7 Bankruptcy and get a free vehicle from the auto lender. If that were the case, every single debtor would borrow money to purchase a Maserati and then file Chapter 7 Bankruptcy! No bank would ever lend money to purchase a vehicle if you could turn around and file Chapter 7 Bankruptcy and get it for free. So, if you file a Chapter 7 Bankruptcy, you will want to maintain current payments on your vehicle loan if you want any chance of keeping the vehicle. This doesn’t change before or after you file Chapter 7 Bankruptcy.
In the situation between you and the trustee, the question is different. There are vehicle exemptions available to protect the “equity” you have in the vehicle from being taken by a trustee for the benefit of your creditors. Most debtors do not lose the equity in their vehicles to a Chapter 7 trustee because debtors are able to exempt all of the equity in the vehicle, if there is any. If you owe 10k on a vehicle worth 10k there is no equity to lose.
When the time is right, when you are ready to get your life back, reach out to Eagan, MN’s highest Google reviewed bankruptcy law firm by going to www.kainscott.com. You will be so glad you did.