Every day at Welker & Associates, we field questions about whether or not people can keep their car when declaring bankruptcy. Terms like thresholds, equity and wholesale value get thrown around, and it can be confusing for people in an already complicated situation.
In order to make it easy to understand, let me explain it in a straightforward manner.
If your vehicle’s equity (net fair market value minus collateral security amount) is $6,600 or less, it is exempt from seizure by your creditors. In other words, it’s protected from your creditors even if you go bankrupt. Even if you own a vehicle worth $100,000, if it has a $95,000 lien registered against it, it’s exempt. A lot of vehicles don’t have any equity because the amount of the car loan registered against them is more than the value of the vehicle. In these cases, provided you can afford to continue making your payments after filing a proposal or bankruptcy, you can keep your car.
The bottom line is, if you’re struggling with debt, don’t let the fear of losing your car prevent you from getting the help you need. Contact us today at 1-800-332-8093 to schedule a free, no obligation consultation where we can figure out if your vehicle will be an item you can keep in bankruptcy.