Can I Keep My Car if I File Bankruptcy?

Generally speaking the answer is “Yes you can keep your car if you file bankruptcy.”  With a few exceptions that will be discussed later, you can keep your car if you file bankruptcy provided you have the means to continue making payments and pay for your basic living expenses.  Most people still have a loan against their car that is close to the amount the car is worth.  In Ohio, you have an exemption in the amount of up to $3,450.00 for one car.  What does this mean?  If you own a car free of any loans or your car is worth more than you owe on it, you can claim as exempt from the trustee an amount up to $3,450.00.  Keep in mind that the trustee represents your creditors and is trying to find assets that he can sell and turn into cash to pay your creditors.  The trustee has to decide if he can take your car and sell it for a profit above and beyond the amount you owe on it if you have a loan plus your exemption of $3,450.00.  The trustee will also incur expenses trying to sell your car that he has to take into consideration, such as appraisal fees, storage fees, and auction fees.  So generally speaking, most people who file bankruptcy get to keep their car.

There are a few exceptions.  If you cannot afford to continue making payments on the car, then your car loan company will be the one who tries to take your car because you cannot afford it.  If you own your car free and clear of any loans and it is worth a significant amount more than your exemption of $3,450.00, then chances are good the trustee would be interested in taking your car and selling it.  You still get your exemption amount of $3,450.00.  If you have more than one car per debtor titled in your name, and they are worth more than the loans, the trustee may pursue the car you cannot apply your exemption too.  The scenarios are many and the best solution is to call an attorney to discuss your individual situation to find out if you will be able to keep your car if you file bankruptcy.

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