How To Keep Your Car After A Bankruptcy Filing
Walking into a courtroom and then walking out with a much lighter debt burden, or at least a promise of a much lighter debt burden, sounds like a dream come true, but filing for bankruptcy protection is not quite that simple. For one thing, it costs money to file for bankruptcy, and if you had lots of money lying around, you would not be contemplating a bankruptcy filing. The costs of a bankruptcy filing are not the only reason that successful bankruptcy filings usually require months of preparation. You must persuade the court that, if it discharges your eligible debts, you will uphold your end of the bargain by paying your remaining obligations; this means that you should keep up with your debt payments as much as possible. You must also present an accurate representation of your financial situation to the court. If you don’t, the court could reject your petition for bankruptcy protection. Even if this could not happen, mistakes during the months leading up to your chapter 7 bankruptcy filing could result in the court ordering you to forfeit assets that you would otherwise have been allowed to keep. The best way to ensure that you get to keep your car and other important assets after a bankruptcy filing is to contact a Plantation chapter 7 bankruptcy lawyer several months before you plan to file.
Does Chapter 7 or Chapter 13 Bankruptcy Offer More Protection for Vehicle Owners?
In a chapter 7 bankruptcy filing, the court can order you to forfeit some of your assets so that it can sell them to settle your debts. The purpose of a bankruptcy filing is to ensure that the process does not leave you destitute, so the court will not liquidate the assets you need to survive. Most of the time, the bankruptcy courts will exempt your car from liquidation, especially if you rely on it for your commute to work. The court will only ask you to forfeit your car if it is an expensive car and you owe little or no money on a car loan. Chapter 13 bankruptcy does not involve liquidation of assets, so giving up your car is unlikely to be a condition of the court accepting your chapter 13 bankruptcy filing.
The Best Protection Is to Own an Old Clunker Free and Clear
If the resale value of your car is $4,450 or less, then you do not have to worry about the bankruptcy court making you sell it. The ideal car for a bankruptcy petitioner is an old jalopy that you have long since paid off. It isn’t worth enough money for the court to worry about it, and it is unrelated to any of your debts.
Work With a Debt Lawyer About Chapter 7 Bankruptcy
A South Florida debt lawyer can help you strategize about preparing for bankruptcy to ensure a successful filing and maximum debt relief and minimum forfeiture of assets. Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.