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“I need my car for work.  Will the bankruptcy trustee/court take my car from me?”

This is a very common question I am asked.  The short answer is yes!  (I have never had a client have their automobile taken from them because they filed for bankruptcy).

The analysis begins by determining whether your automobile has a lien (loan) on it or if it has been paid in full.

If you owe more money on your car than what it is worth then, by  definition, it is “upside down” and has no equity.  Therefore, the bankruptcy won’t or cannot sell your car because there is no benefit to do so.

If your car is paid in full then you will likely be able to use an exemption or exemptions to protect the car from being sold by the trustee.  Or, if there is equity beyond what is still owed on the car then you may use exemptions to protect that equity.  In both of these instances, however, it is important for us to discuss your options which we will do in your initial FREE CONSULTATION.

“Can the lender take my car even if I am current on my payments?”

Short answer here is no.  If you owe money on your car, and want to keep it, simply continue to keep making your required payments.

Often is the case that your bank will tell you that you MUST sign a Reaffirmation agreement (BEWARE).  As you can imagine, South Carolina has laws regarding reaffirmation agreements.  It is rarely in your best interest to sign one. Likewise, they are very rarely granted by the court.

What other options do I have with my automobile(s)?

Some of my clients, no matter the reason, no longer want to keep their vehicle(s).  If this is you, you can choose to “surrender” the vehicle and be free from the obligation to pay for it.  In turn, you can purchase a different vehicle that suits your particular needs.

Lastly, you could “Redeem” the automobile.  It requires you to pay in one lump payment the present fair market value of the car.  Rarely is the case where this is a viable option.  However, like all of the above, it is something we can discuss during your FREE CONSULTATION.

 

Clients frequently ask me the following questions or make the following statement….

1. “Can I keep my house if I file for a chapter 7 bankruptcy?”

The short answer is likely yes.  In general, if your home has equity that can be exempted and you continue to make your required payments then you can keep your home.

If there is no equity in your home (your home is “underwater”) then the bankruptcy trustee won’t attempt to sell your home.  Likewise, if there is no equity above your exemption in your home, then the trustee won’t attempt to sell your home.

One role of the chapter 7 bankruptcy trustee is to liquidate assets that are non-exempt.  Therefore, if your home is exempt then the trustee cannot liquidate it and you can keep it.  If there is non-exempt equity in your home, and you want to keep it, then you likely will not consider filing a chapter 7 bankruptcy but may consider a Chapter 13.  This distinction is critical and something you should discuss with me.

If you are keeping your home, it is critical that you continue to make your required mortgage payments.  The bankruptcy discharges / eliminates your personal liability on the debt, but it does not alter or satisfy the lien.  As a result, after your discharge, your lender still has a lien on your home and should you not make your payments they can exercise any and all state rights it has in your home.  Therefore, KEEP MAKING YOUR REQUIRED PAYMENTS.

2.”Can I keep my home if I am behind on my payments?”

The answer more than likely is yes.  Under this situation you may want to file a Chapter 13 where you are allowed to pay the arrears back through your bankruptcy over time–years.  If you find yourself in this situation, I encourage you to contact me so we can discuss your options.

3. “I don’t want to put my house in the bankruptcy.”

Your home is an asset.   Therefore, you must “put it” in your bankruptcy.  One of the fundamental requirements of filing for bankruptcy is to list ALL your assets.  Your home is an asset.  But, as outlined above, just because you file for bankruptcy does not mean you’re going to lose your home.

 4.  ‘What if I do not want to keep my home?”

You are not required to keep your home if you file.  You may elect to “surrender” it.  Many of my clients select this option for a variety of reasons.  Each individual’s circumstances are unique .  It is helpful to seek legal advice as to which option makes the most sense for you.