Many homeowners are surprised to learn that solar panel debt can sometimes be reduced or reorganized through bankruptcy.

In Texas, solar panel loans are becoming more common, and for some families, the monthly payments can create serious financial pressure on top of credit cards, personal loans, or other debt.

If you are considering bankruptcy and also have solar panel financing, it is extremely important to discuss those loans with an experienced bankruptcy attorney.

Are Solar Panels Included in Bankruptcy?

In many cases, solar panel loans can be addressed in both Chapter 7 and Chapter 13 bankruptcy.

These loans are often structured over long repayment periods, sometimes lasting 20 to 30 years, with monthly payments that may range from hundreds of dollars each month.

Depending on your situation, bankruptcy may provide options to:

• Reduce the amount owed on the solar panels
• Reorganize the debt into lower payments
• Potentially discharge unsecured debt while keeping the panels
• Resolve burdensome solar panel financing obligations

Why Solar Panel Loans Are Different

Many solar panel lenders place what is called a UCC lien on the panels themselves.

This is different from your mortgage.

The solar panels are generally considered personal property attached to the home, which can create unique bankruptcy strategies depending on the type of case filed.

Because of this, the actual value of the panels may become very important during bankruptcy proceedings.

Can You Reduce What You Owe on Solar Panels?

In some Chapter 13 cases, borrowers may be able to pay back the current value of the solar panels instead of the full loan balance.

This is commonly referred to as a “cramdown.”

In certain Chapter 7 situations, there may also be options involving redemption of the property based on its actual value.

For example:

• A homeowner may owe tens of thousands of dollars on solar panel financing
• But the actual present-day value of the panels may be significantly lower
• Bankruptcy may allow repayment based on the panels’ value rather than the original financed amount

Every case is different, and eligibility depends on several factors, including income, timing, loan structure, and the age of the solar panel contract.

Can You Keep the Solar Panels?

In many situations, yes.

Depending on the bankruptcy chapter filed and your financial circumstances, it may be possible to keep the solar panels while still reducing or restructuring the debt tied to them.

This is one reason why solar panel financing should always be reviewed carefully during a bankruptcy consultation.

Speak With a Texas Bankruptcy Attorney About Solar Panel Debt

Solar panel loans can complicate bankruptcy cases, but they can also create opportunities for financial relief that many people are unaware of.

If you are struggling with debt and also have solar panel financing, speaking with an experienced Texas bankruptcy attorney can help you better understand your legal options and whether bankruptcy may help reduce the financial burden.