Being able to have nearly all your debts forgiven and making a fresh start with bankruptcy can present some consumers with an ideal solution. Unfortunately, if you file chapter 7 bankruptcy, you could be placing some of your personal property at risk. For what you need to know about vehicles and bankruptcy, read on.
Liquidation Chapter – With chapter 7, your entire personal property holdings can be subject to seizure by the bankruptcy trustee. That means homes, cars, artwork, boats, jewelry, and more.
Protections – Exemptions can allow filers to keep some or all of their personal property and not lose anything when they file.
Secured or Unsecured – Some debts are unsecured and thus not associated with property. Credit cards, medical bills, and personal loans are all unsecured debts. Other debts are secured by the property. Your vehicle debt, for example, is secured by the vehicle itself.
The Value of the Vehicle – A great deal of what happens to your vehicle in bankruptcy depends on the value of it. Value is determined by certain reference sources like Kelley Blue Book and others. When determining value, be sure to consider issues like wear and tear and included accessories.
Your Auto Loan – Another important factor is the auto loan balance. The less you owe on the loan, the more valuable your car may be. Unfortunately, this is one time when you want to keep the value of your vehicle as low as possible. On the other hand, if you owe a lot of money, the value is decreased by the loan balance.
The Bankruptcy Trustee – The administrator of your bankruptcy is known as a trustee, and they handle things like the liquidation of property for filers. They base their decisions on whether or not to seize a given piece of property on value. Loan balances must be paid off if they seize a vehicle with a lien on it. The trustee will evaluate the totality of the finances when considering taking a vehicle. In many cases, they won't bother unless the funds available are considerable.
Exemptions Can Save the Day – A final consideration is exemptions. This is a dollar figure that can be deducted from the value of an item like a vehicle. If you have enough of an exemption, you can keep the car. Some states allow filers to keep at least one vehicle regardless of its value. Speak with your bankruptcy lawyer about your particular situation to find out what might happen with your case.
For more information, reach out to a professional at a bankruptcy attorney service.
Share16 June 2020
When I began the divorce process, I knew that I wanted to change my name back to my maiden name. I no longer wanted to be associated with the family name of the man that I was divorcing. The problem was, I have three kids that all had their father's name. I wanted to know if I would be able to change their last names to my maiden name rather than having them carry that family's name for the rest of their lives. I found out a lot about what it would take and began working to create this blog to help other women wanting to do the same thing.
