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- 1). Write a letter to your auto loan lender. Explain that you desire to surrender the car to the lender to avoid filing for bankruptcy. A lender likely is willing to accept your voluntary surrender proposal in order to avoid the expense of gaining title to and possession of the vehicle in a bankruptcy case.
- 2). Obtain an "Agreement to Surrender Vehicle." Your lender likely has a standard form agreement available.
- 3). Review closely the agreement. Ideally, with the surrender of the vehicle you are relieved of all further liability under the loan. If there is not a significant disparity between the balance outstanding on the loan and the value of the car, the lender likely will be willing to grant you this relief. A lender normally finds it more affordable to relieve you of liability for any additional amount due on the loan above the value of the car than to pursue additional collection activity against you.
- 4). Execute two copies of the agreement. Both you and the lender need to have original copies of the surrender agreement.
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