Bankruptcy Where You Keep Your Car?
Bankruptcy is a legal process that allows individuals and businesses to restructure or eliminate their debts. It can be a difficult and stressful decision, but it can also provide relief and a fresh start for those struggling with overwhelming debt. One question that often comes up when considering bankruptcy is what happens to personal property, such as a car. Can you keep your car if you file for bankruptcy? The answer is that it depends on the type of bankruptcy you file and the value of your car. Know us here.
There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 bankruptcy is also known as “liquidation” bankruptcy because it involves selling off some of the debtor’s assets to pay off creditors. Chapter 13 bankruptcy, on the other hand, is a repayment plan where the debtor agrees to pay off a portion of their debts over a period of three to five years.
If you file for Chapter 7 bankruptcy, the court will appoint a trustee to review your assets and determine which ones can be sold to pay off your creditors. The trustee will consider the value of your car and whether it is necessary for your job or daily life. If the car has a low value and you do not need it for work or other essential purposes, the trustee may decide to sell it to pay off your debts. However, if the car is necessary for your job or daily life and has a higher value, you may be able to keep it.
In most states, there is an exemption for a certain amount of equity in a car. This means that if the value of your car is less than the exemption amount, you can keep it without having to pay off the creditor. The exemption amount varies by state, so it is important to check with a bankruptcy attorney to determine the amount in Texas.
If you file for Chapter 13 bankruptcy, you will be able to keep your car as long as you continue to make your monthly payments. Chapter 13 bankruptcy involves creating a repayment plan where you agree to pay off a portion of your debts over a period of three to five years. If you have a car loan, the monthly payments for the car will be included in the repayment plan. As long as you make the monthly payments according to the plan, you will be able to keep your car. More about Bankruptcy here.
It is important to note that if you are unable to make the monthly payments on your car loan, the creditor may repossess the car even if you are in Chapter 13 bankruptcy. It is also important to be aware that if you have a car loan and you do not include it in your bankruptcy petition, you will still be responsible for paying off the loan even if you discharge your other debts.
In conclusion, whether you can keep your car during bankruptcy depends on the type of bankruptcy you file and the value of the car. If you file for Chapter 7 bankruptcy and the car has a low value and is not necessary for your job or daily life, the trustee may sell it to pay off your debts. However, if the car has a higher value and is necessary for your job or daily life, you may be able to keep it. If you file for Chapter 13 bankruptcy, you will be able to keep your car as long as you make the monthly payments according to the repayment plan. It is important to speak with a bankruptcy attorney to understand your options and determine the best course of action for your specific situation.
Get Help From A Bankruptcy Attorney
How To Find Us
1005 E 40th St
Austin, TX 78751
1616 Austin Avenue, Suite A
Waco, TX 76701
By Appointment Only
Austin & Waco
Call or Text: (855) 502-0555
Fax: (512) 323-9351