Can I Keep my car in Bankruptcy?
You may wonder if you file bankruptcy in Georgia whether you can keep your car. Most of the time, you can keep your car in bankruptcy. There are two ways that you can lose your car in bankruptcy.
The first way that you can lose your car is by failing to make timely payments . If you are in a Chapter 7, you have to make timely payments to the car creditor. If you are in a Chapter 13 and your car is included in your Chapter 13 payment, then failure to make timely payments to the trustee can result in the dismissal of your case and ultimately the loss of your car.
The second way that you can lose your car in a bankruptcy case, specifically in a Chapter 7, is if you have unprotected equity in your car. In Georgia, you are allowed up to a $3,500.00 exemption or protection of your vehicle.
Thus, if you own a car that is worth more than $3,500.00 and file Chapter 7, the car can be subject to sale by the bankruptcy attorney in order to recover money to pay back your creditor. Most debtors who file bankruptcy do not have equity in their vehicles, simply because the vehicles are financed. For example, if you own a vehicle that is worth $15,000, but you owe $12,000 on the vehicle, then there is only $3,000 in equity. Thus, you would be able to use your protection/exemption on your car and fully protect it from sale.
If you have any questions about how to ensure you can keep your car in a Georgia bankruptcy case, call the Law Offices of Charles Clapp at 404.585.0040 to schedule a free consultation.