Can I Keep My Car In Bankruptcy?
Many of us depend on a car to get to work, the store, medical appointments and to visit friends and family. While many people in Sacramento can travel on public transportation, it may be impossible to do so if you live outside the city or in an area with poor service. However, if you are filing bankruptcy, you may be concerned about whether or not you can keep your vehicle. If you give up your vehicle, you may not be able to work, which is counterproductive to building your finances after discharge or making payments to a trustee.
Whether you must give up your vehicle depends on your particular circumstances. In some cases, debtors can keep their vehicles after filing bankruptcy. The team at Amerio Law Firm in Sacramento will work with you to find the best solution to your problem and help you protect as many of your assets, including your car, as possible.
Two Types of Bankruptcy
For consumers, there are usually two choices for filing bankruptcy: Chapter 7 and Chapter 13. In a general sense, Chapter 13 is the right choice if you want to keep assets and pay for them, as this type of bankruptcy allows you to make payments to a trustee and reaffirm your debt, often at a lower interest rate than you are now paying. However, in order for this to work, you have to meet certain qualifications for filing Chapter 13 and you have to prove to the court your ability to make payments under the restructuring plan.
Judges are much more likely to allow you to reaffirm vehicle debt if the vehicle is not seen as a luxury car. If you have overspent and purchased a very expensive vehicle, it may be difficult to work that vehicle successfully into a Chapter 13 plan. Some debtors choose to keep one vehicle and give up another to creditors.
How Exemptions Work
It may also be possible to keep a vehicle when filing Chapter 7 bankruptcy, especially if the vehicle is older and not worth much money. California exemptions allow you to exempt a certain amount of equity in your vehicle; how much depends on your age, your marital status, how you are filing and other factors. It is important to choose your exemptions wisely; for this, you may want to seek the help of an attorney with experience in handling bankruptcy cases.
Contact the Amerio Law Firm in Sacramento today if you are considering filing bankruptcy. Do not take this important step alone; instead, trust Ashley Amerio and her team to help you protect your assets and discharge your debts.