Can I keep my Car in a Chapter 7 bankruptcy?
Throughout the recent years I have handled numerous bankruptcy cases in Bullhead City, Kingman and Lake Havasu City, Arizona. I believe many folks don’t even bother to call an attorney because they assume being able to keep their car is not an option.
In Arizona, the answer to ” Can I keep my car in a Chapter 7 Bankruptcy ” is Maybe. A person can retain up to $6,000.00 equity in their vehicle. So if your car is worth 6,000.00 or less with no bank note attached your car is exempt and you can keep that asset. Similarly by way of example if your car is worth $25,000.00 and you only owe $19,000.00 you would be able to retain this vehicle without any issues or payments to the bankruptcy estate. All you would do is continue to pay the bank. A person must attempt to reaffirm the loan and this process will be explained in a separate blog entry. Even if the judge denies the reaffirmation agreement you can still “pay and drive.”
There are other common exemptions such as household furniture, clothing, rental deposits and other ordinary items we all commonly possess. Bankruptcy really is not a crippling process once you evaluate all of your options.