Many believe that Chapter 7 Bankruptcy in Wellington FL results in the complete liquidation of assets, but that’s not always the case. In this guide, potential clients will learn some of their options to prevent liquidation and keep their personal vehicles when filing for Chapter 7.
A Car Without A Loan
When a debtor doesn’t owe money on his or her car, the vehicle’s value becomes the property of the bankruptcy estate. However, to protect some property from Chapter 7 liquidation, Florida and federal laws allow a debtor to exempt some of the car’s value. When enough non-exempt equity remains in a vehicle, the debtor can either pay the trustee the equivalent amount or turn the vehicle over to the estate.
Cars With Payment Plans
When a person in Chapter 7 still owes money on a vehicle, they can reaffirm the debt, continue making payments, and retain the car. Upon execution of a reaffirmation agreement and a subsequent bankruptcy discharge, a debtor must follow the agreement, and they remain responsible for the debt. For the approval of a reaffirmation agreement, the debtor must prove to the court that they need the vehicle and that the payment will not cause undue financial hardship. Debtors can also retain their cars through redemption. Here, upon the court’s approval, the debtor pays the lender the car’s market value.
Typically, a debtor should talk to a bankruptcy attorney during this stage of the discharge process. While most debts are discharged in Chapter 7 bankruptcy, if certain assets are too valuable, they may be sold. For instance, if a debtor has an exotic or classic car worth more than $100,000, it may be seized. There are some ways around that, especially for those who work with local bankruptcy lawyers.
Contact a Florida Bankruptcy Lawyer Today
Chapter 7 Bankruptcy in Wellington FL gives debtors a chance to rebuild their finances and get a fresh start. However, it’s sometimes difficult to decide which property should be retained and which should be liquidated to pay debts. Therefore, if a debtor is considering a bankruptcy filing in the state of Florida, they should visit Koplowbankruptcy.net for more details. To schedule a consultation with a bankruptcy attorney who can explain various legal options, call today.