Do I Lose My Car If I File Chapter 7 Bankruptcy?
On behalf of Bankruptcy Law Firm of Clare Casas on Thursday, August 26, 2010.
Florida Statute 222.25(1) allows you to protect up to $1,000 of equity in a motor vehicle. This exemption can only be used on a car. If your car is only worth $600, you cannot use the remaining $400 to protect any other asset. Additionally, the statute states that you can only use it on a "single vehicle."
That doesn't mean that you automatically lose your car if you have more than $1,000 in equity. Under Florida law, you also have $1,000 in personal property exemption money available that can be used for any type of persona property - including a car. If you do not own a home or otherwise "claim or receive" the benefit of homestead exemption, you also get an additional $4,000 of personal exemption money that you can also use towards any kind of personal property. Once again, that can include your car.
Most people have cars that are financed and between the $1,000 vehicle exemption and their personal exemptions, they find that they have enought to protect their car.
If you have more equity in your car then you can protect, do not despair! If you file a Chapter 7 bankruptcy in Broward County, the trustee may either abandon their interest in your car if there is not enough equity to justify the expense of selling the car. If they don't abandon their interest, they will usually give you the option of purchasing your equity from them so you can keep your car.
A Fort Lauderdale bankruptcy attorney can look at your specific situation and advise you on what your particular outcome may be.