Bankruptcy in Breckinridge County: Can I Keep My Car If I File Bankruptcy?

In Breckinridge County, Kentucky, and anywhere else in the US, it may be time to consider filing bankruptcy if you are struggling to pay your bills and you seem to fall farther and farther behind. All too often people who could benefit from the protection offered by bankruptcy hesitate to consider bankruptcy as a solution to their financial problems. Often this arises from a misunderstanding as to the effect of bankruptcy.  Sometimes people think that they will lose all of their assets and belongings. This is simply not true.  In most instances people can keep most, or all, of their assets including equity in a home, vehicles, furniture and furnishings and retirement benefits.  You will need to talk to an experienced Breckinridge County bankruptcy attorney to make sure you know what you can and cannot keep in a bankruptcy proceeding.

Bankruptcy in Breckinridge County

Most individual (or married) debtors file bankruptcy in Breckinridge County under either Chapter 13 or Chapter 7. Chapter 13 is a repayment plan under which the debtor undertakes to pay all or part of their indebtedness through a plan filed with and approved by the Bankruptcy Court.  Secured debts such as automobile loans maybe paid through the plan or paid directly to the creditor (outside the plan).  In the vast majority of cases debtors keep their vehicles and most other assets.

In a Chapter 7 bankruptcy, the majority of your debts are discharged, or forgiven, at the end of the bankruptcy process. Although the Trustee in a Chapter 7 bankruptcy does have the authority to sell non-exempt assets owned by the debtor in a Chapter 7 bankruptcy most debtors who file for Chapter 7 do not have any non-exempt assets.  The key is to use the available exemptions to protect assets, including your car.

The U.S. Bankruptcy Code includes a list of federal exemptions. Exemptions are simply the property which a debtor can keep in a bankruptcy.  Federal exemptions allow a debtor to exempt up to $3,675 of equity in a vehicle and have additional exemptions which can be used to help a debtor retain a car even where the equity exceeds $3,675.00.  Federal exemptions are doubled if you are married and filing jointly.