subject: Talk To A Bankruptcy Attorney About Your Vehicles [print this page] Working with a bankruptcy attorney to file your case may be one of the most important decisions you make. You do have plenty of concerns to discuss. However, it is up to you to determine what the right decision for you. To make such a decision, you need to consider what will happen with your assets. Depending on the type of assets you have, you may need to take steps to protect them from the courts if you do decide to file. The process can be complicated and does vary from one state to the next.
You Own One Vehicle
Most states have an exemption that affords the family to keep one vehicle that may be valued under a certain amount. For example, if you own a car that is worth just a few thousand dollars and it is the only one you have, chances are good your state's exemption will protect you from losing it. On the other hand, if you own an expensive sports car valued at several thousand dollars, chances are good that you will lose it if you file Chapter 7. Your bankruptcy attorney will guide you in this.
You Own More Than One
If you own numerous vehicles including recreational vehicles, it is a good idea to discuss your options with a lawyer about how to prevent the loss of these during the process. Instead of filing Chapter 7 in which your assets are liquidated to repay your debt, Chapter 13 will protect those assets for you. In this form, you will not lose your assets. Rather, you work out a play to repay most of your debt over a three to five year period.
You Owe on a Vehicle
Perhaps you have a loan on one of your vehicles. If you want to keep the car, you will need to affirm the loan with the lender, which simply means the lender agrees to maintain the terms of the loan through the proceeding. You have to be caught up on payments and you cannot fall behind. If you do not want to keep the vehicle, you can elect to allow the court to seize it but you will not receive any cash for its value. Additionally, this can further damage your credit. However, if you cannot make payments, this is a good option to take.
Work with your bankruptcy attorney to determine if you are at risk of losing your vehicles. You should also discuss your case thoroughly with the lawyer about any risks you may be facing for other assets you own. It is often possible to have some level of protection in place, but only if you plan for it.
