If you own your vehicle outright, then you have nothing to worry about so long as the value of your vehicle falls under the cap for the vehicle exemption. This cap is $5,350 if you use 703 exemptions and $3,050 if you use 704 exemptions (See my post on 703 vs. 704 Exemptions). If you’re like most of my clients and are making car payments, then the kind of bankruptcy you file will determine how your car will be affected.
Cars are rarely an issue in a Chapter 13 bankruptcy. Your car loan is merely another debt to be paid through your Chapter 13 plan. So, you’ll get to keep your car as long as you stick to your Chapter 13 plan.
If you owe on your car and you’re filing a Chapter 7, you’ll have to decide if you want to surrender the vehicle or keep the car and continue making payments. You have to let the court know your intention by completing a form called the Statement of Intention for Individual Filing Under Chapter 7. If you want to walk away from your vehicle, then you just check the box on the Statement of Intention indicating that you surrender the vehicle.
If you’re looking for a bankruptcy attorney in the Fairfield area, feel free to give us a call to schedule your free consolation.
Categorized in: Assets