Bankruptcy can be a complicated process, and there are many different kinds of bankruptcy. Each type of bankruptcy will have different effects on your financial situation and how you move forward with your life. For some people, filing for bankruptcy might be the best way to get back on track financially and get a fresh start. If this sounds like you, you might be wondering if you’ll lose your car by filing for bankruptcy.
Bankruptcy isn’t just about liquidating all of your assets and giving them away. There are certain exclusions to bankruptcy which means that certain properties and assets cannot be included in the proceedings. In this blog post, discover whether you can file for bankruptcy without losing your car.
Can You Keep Your Car After Filing Bankruptcy?
If you file for bankruptcy, you may be able to keep your car. This depends on the type of bankruptcy you file and whether you are current on your payments. If you are behind on your payments, you may still be able to keep your car if you can catch up on the payments.
If you file for Chapter 7 bankruptcy, you may be able to keep your car if it is paid off or if you are current on your payments and can afford the monthly payment. If you file for Chapter 13 bankruptcy, you may be able to keep your car as long as you are current on your payments. Your bankruptcy lawyer can give you specific details about your car and your case.
What Happens to Your Car in Chapter 7 Bankruptcy?
If you file for Chapter 7 bankruptcy, one of the things that may happen to your car is that it may be repossessed. However, you may be able to keep your car if you can exempt it under the motor vehicle exemption. The motor vehicle exemption allows you to exempt a certain amount of equity in your car. The amount varies by state. In Minnesota, the motor vehicle exemption covers a vehicle up to $5,000.
What Happens to Your Car in Chapter 13 Bankruptcy?
In Chapter 13 bankruptcy, your car loan is not discharged, and you may be able to keep your car outright if you are current on payments. If you are behind on payments, you may be able to keep the vehicle and catch up on payments. If you cannot afford the payments or do not want to keep the vehicle, you can surrender the car back to the lender. Once the car is surrendered, the lender will take the car back and may sell it to satisfy the debt.
What Happens to a Leased or Financed Car in Bankruptcy?
If you lease or finance a car and then file for bankruptcy, you will have to decide whether to keep the car or surrender it. If you keep the car, you will continue to make payments on the loan. If you surrender the car, the lender will repossess it.
What Bankruptcy Exemptions Apply to My Car?
The Chapter 7 bankruptcy code allows for a motor vehicle exemption. This means that you can keep your car as long as its value falls below a certain amount. The value of your car is determined by your bankruptcy attorney, but it is usually based on the Kelly Blue Book value or the amount you owe on the car, whichever is less. If your car is worth more than the exemption amount, you may still be able to keep it if you can prove to the court that you need it for transportation to work or school.
Calculating Whether You Can Keep a Car After Filing Bankruptcy
Whether you can keep your car during bankruptcy depends on several factors, including the value of your car, the amount of your car loan, and the exemption amount in your state. If the value of your car is less than the exemption amount, you may be able to keep it. If the value of your car is more than the exemption amount, you may have to sell the car and use the proceeds to pay off your creditors. You may also be able to keep my car if you reaffirm the loan and continue making payments.
Schedule a Consultation With a St. Cloud Bankruptcy Lawyer
The good news is that you can keep your car in most cases, but there are a few things you need to know. The type of bankruptcy you file will affect the value of your car and the exemption amount. If you have questions about bankruptcy, contact a St. Cloud bankruptcy lawyer. Kain + Henehan is an experienced bankruptcy firm with offices in St. Cloud, Minnesota, and the Twin Cities. Contact us by calling (612) 438-8006 or filling out the online form.
