How To Keep Your Car In A Bankruptcy Case
Anyone who is considering personal bankruptcy in West Palm Beach is likely thinking about practical assets that they will need, such as their automobile, and wondering if it is possible to keep your car in a bankruptcy case. Whether or not you will be able to keep your motor vehicle will depend upon a number of factors, including the type of bankruptcy you will be filing for, the amount of equity you have in your car, whether you are still making payments on your vehicle or own it outright, and whether (if you are still making payments) you are behind on them. The following information explains how you may be able to keep your car when you file for bankruptcy in South Florida.
Consider the Automobile Exemption
If you have paid off your car and own it outright, the automobile exemption in Florida may become especially important for keeping your car, especially in a Chapter 7 bankruptcy case. Under Florida law, debtors can exempt up to $1,000 of equity in a motor vehicle. This amount is not a lot if you have a relatively new vehicle or one that you paid off recently. If both you and your spouse are filing for bankruptcy, that exemption doubles. If you do not claim the homestead exemption in Florida, however, you will also be eligible for a wildcard exemption of $4,000 that you can use to exempt one or more assets of your choosing. You could use the wildcard exemption to exempt additional equity in your motor vehicle in order to keep it and avoid having it liquidated.
In a Chapter 13 bankruptcy case, the exemption is less important when it comes to being able to keep your car since assets are not liquidated. Instead, the amount of non-exempt assets you have will be used to construct your repayment plan.
Catch Up on Automobile Payments in a Chapter 13 Case
In a Chapter 13 case, not only will you not have to worry about liquidation and losing your motor vehicle, but you will actually be able to use your Chapter 13 bankruptcy case to catch up on car payments you owe if you are still making payments to a lender. As such, your vehicle will not be repossessed, and you will be able to keep it by getting caught up on your auto loan.
Reaffirm Your Auto Loan in a Chapter 7 Case
If you are still making payments on an auto loan and planning to file for Chapter 7 bankruptcy, if you are not behind on payments, you may be able to reaffirm the loan and to keep your car after the bankruptcy case. For a bankruptcy court to agree to a reaffirmation agreement, you will typically need to show that you will be able to afford the car payment after your bankruptcy case without undue hardship.
Contact a Bankruptcy Attorney in West Palm Beach
Cars and trucks are essential for most people in West Palm Beach, and your motor vehicle can be one of the most important assets you own. You may use it to take your kids to school, and you likely rely on your vehicle to get to work. If you are planning to file for bankruptcy, you should get in touch with a West Palm Beach consumer bankruptcy attorney at Kelley Kaplan & Eller who can help you to determine the best way to keep your car in your bankruptcy case.
Sources:
leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.25.html
law.cornell.edu/uscode/text/11
