Ask Dr. Don By Don Taylor, Ph.D., CFA • Bankrate.com

Keep the car in bankruptcy?

Dear Dr. Don,
I am about $11,000 in debt, I've lost my job and I am struggling to make payments. I also have a leased vehicle that I need. If I file for bankruptcy can I keep my car? Can I just file for the stuff I can't pay?
Please help,
Pete Predicament

Dear Pete,
You don't get to pick and choose which debts you want to list in your bankruptcy filing. You have to list all your debts when you file. In a Chapter 7 bankruptcy filing, the court establishes a bankruptcy estate comprised of your nonexempt assets. The value of these assets is used to pay your creditors. The court will discharge all eligible debts.

You don't have any equity in your leased vehicle, so the vehicle can't be sold to satisfy another creditor's claims. The bankruptcy filing can be used to break the lease contract, but since you want to keep the car, there's no reason to pursue that end.

If you're current on your lease payments, you should be able to reaffirm the lease contract with the leasing company and the lease can survive the bankruptcy filing. The bankruptcy court will verify that you aren't being pressured to reaffirm the debt.

The U.S. Courts Web site has an online pamphlet, Bankruptcy Basics, that will give you a solid overview of what bankruptcy can and can't do for you. Give it a quick read and then talk to a bankruptcy attorney about filing for bankruptcy.