If you’re struggling with the idea of going into a bankruptcy because of the fear that you’ll lose many of the things you owe, set that aside for a moment to learn more about how a bankruptcy can help and how you can keep many of the assets in your possession. With both Chapter 7 and Chapter 13 bankruptcies, there are exemptions and methods of keeping certain assets that you need.
One of the main items that people like to keep is their vehicle. You should know that filing for a Chapter 7 bankruptcy will immediately place an automatic stay that prevents lenders from repossessing your vehicle. The vehicle could be seized and sold to pay back your debts, but you may also be able to have it exempted if you choose to continue paying the debt on time.
Every state has an exemption applying to vehicles in bankruptcy. You may have the option of exempting the entire value of your vehicle so that you can protect it. If your vehicle is worth more than the state limit, then you may need to use your wildcard exemption to protect it. A wildcard exemption allows you to protect an item of choice from bankruptcy, so long as it isn’t valued at more than the wildcard limit.
It can be difficult to imagine life without your vehicle, so using these methods to protect it is a good idea. Your attorney would be happy to talk to you about these exemptions and how to keep your primary mode of transportation, so you can continue to work and bring in an income.