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How To Claim Bankruptcy And Keep Your Car

Farming Fishing And Aquaculture Exemptions

If I FIle for Bankruptcy Can I Keep My House and Car? | Learn About Law
  • If your primary occupation is farming, personal property used by you to earn income are exempt up to $10,000
  • If your primary occupation is fishing, personal property used by you to earn income are exempt up to $10,000
  • If your primary occupation is aquaculture, personal property used by you to earn income are exempt up to $10,000

Northwest Territories / Nunavut / Yukon Exempt Property

  • Food and fuel: twelve months supply;
  • Necessary clothing: no dollar limit;;
  • Household furniture and appliances: no dollar limit;
  • Medical and dental aids: no dollar limit in Nunavut and Northwest Territories
  • Tools and animals of your trade : up to; prescribed limits in Nunavut and Northwest Territories; up to $600 in Yukon
  • Principal residence
  • One motor vehicle in Nunavut and Northwest Territories
  • ;The above exemptions for the territories do not apply if:

    • You are behind on child or spousal support payments.
    • You have absconded or are about to abscond from the territories, leaving no spouse or family behind.

    Statute: Read the Yukon Exemptions Act , NWT Exemptions Act , and Nunavut Consolidation of Exemptions Act .

    A Licensed Insolvency Trustees is your trusted resource for current information on insolvency solutions, and factors that may affect your specific situation. Contact a Licensed Trustee today. Your first appointment is free, and your discussion is confidential.

    Find a local trustee that you can rely on. We have trustees everywhere from British Columbia to Ontarioand more.

    Keeping Your Home In Chapter 7 Bankruptcy

    A Chapter 7 bankruptcy is often more attractive because it’s simpler and gets you on the road to financial stability sooner because you don’t pay into a three- to five-year repayment plan.

    You’ll be able to keep your house as long as you meet the following criteria:

    • You’re current on your house payments.
    • You can protect all of your home equity with a bankruptcy exemption .
    • You’ll be able to continue making your payments in the future.

    Chapter 7 bankruptcy does have some limits as a tool for managing mortgage debt, however. It won’t help you catch up on past-due payments, and it might be challenging to protect the house if you have a lot of equity in it. The bankruptcy trustee will sell it and use the nonexempt equity to pay other creditors, such as back taxes, credit card balances, and personal loans.

    Chapter 13 bankruptcy can be a better choice to address both those issues so you can keep the home. Chapter 13 might also allow you to get rid of second or third mortgages.

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    Lottery Winnings Or Inheritances

    If you win the lottery or receive an inheritance after youve filed, but before youve been discharged from bankruptcy, that money must be given to the LIT, who will distribute it to your creditors. If the amount youve received is greater than the debts you owed, you can keep whats left after your creditors have been paid off.

    What Is The Colorado Vehicle Exemption

    How to Claim Bankruptcy and Keep Your Car

    The Colorado vehicle exemption allows you to keep up to $7,500 in equity in any vehicles you own. So, if your car is worth $12,000 and you owe $10,000, you have $2,000 in equity, which will be entirely protected by the Colorado vehicle exemption. If you file a joint petition with your spouse, the exemption amount is doubled. If you use your vehicle for work , we might be able to apply the Colorado tools of the trade exemption, which allows you to protect up to $30,000 in tools you use to earn a living.

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    Benefits Of Filing Under Chapter 13

    The automatic stay will stop any efforts by the lender to repossess your car. You may be able to get your car back if you file for bankruptcy soon after the lender repossessed your car. Meanwhile, you can integrate the back payments owed on your car loan into your Chapter 13 repayment plan while making current payments. This will prevent repossession permanently if you can keep up with both sets of payments. On the other hand, if you feel that you would prefer to give up the car, you can surrender it and avoid making further payments.

    Cars tend to lose value quickly, which may mean that the amount of a car loan ends up being greater than the value of the car. Chapter 13 allows a debtor to reduce the amount owed on a loan to the value of the asset attached to the loan, while turning the remainder into non-priority unsecured debt. You may not need to pay back non-priority unsecured debt in your payment plan, or you may need to pay back only part of it. To trigger this feature, however, you need to have owned the car for more than two and a half years before filing under Chapter 13.

    Gifts Transfers Of Property Or Special Treatment

    Any gifts or transfers of property youve made in the year prior to filing for bankruptcy will need to be reviewed by your LITand could be reversed by the court. You will also need to advise your LIT of any payments or preferential treatment to your creditors in the three months prior to declaring bankruptcy .

    For more information about bankruptcy exemptions, you can click the button below to book a free initial consultation with a Licensed Insolvency Trustee.

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    How Do Bankruptcy Exemptions Work

    Most of the Chapter 7 bankruptcy exemptions have a limit. This means that anyone fiing bankruptcy can protect certain types of property up to a certain amount.

    For example, say your car is worth $3,500, and the exemption for motor vehicles in your area is up to $6,000. In this case, you would be allowed to keep your vehicle.

    Say, however, that your vehicle is worth $9,000. In this situation, your trustee can sell your vehicle for $9,000. They would then give you $6,000 of the profits, and divide the remaining $3,000 amongst your creditors.

    Reaffirm Your Current Car Loan

    CAN YOU FILE BANKRUPTCY AND KEEP YOUR CAR AND HOUSE

    Lenders take one of two positions with a car loan in bankruptcy. The majority require that you complete a court-approved reaffirmation agreement. This is a legal, enforceable contract filed with the bankruptcy court and signed off by the judge. It states your promise to repay all or a portion of a debt that may otherwise have been subject to discharge in your bankruptcy case.

    Some lenders demand that you sign this agreement and will not send you statements or report payments to the credit bureau without the court-approved agreement. In many instances, lenders consider it a breach of the terms of your loan and will repossess the vehicle if you fail to sign the agreement.

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    Write A Letter Of Explanation

    Your lender takes a careful look at your finances when you apply for a mortgage. Every time a lender issues a mortgage, they take a risk. Lenders need to know that youll make your payments on time every month. Of course, a bankruptcy on your record is a major red flag.

    You can increase your chances of getting a mortgage after bankruptcy by writing a letter of explanation. A letter of explanation tells your lender more details about your bankruptcy and why you needed to declare bankruptcy.

    You might want to include details on the circumstances that led to your filing and how your financial life has changed since then. Also, explain the steps youve taken to prevent a future bankruptcy as well like paying off debt and building an emergency fund.

    A letter of explanation isnt a requirement to get a mortgage after bankruptcy, but it can help your lender see the bigger picture instead of just a set of numbers. Include your letter of explanation with your mortgage application when you request a preapproval.

    Car Loans: Additional Issues To Consider

    Even if the trustee doesn’t sell your car to pay your creditors, you still have one more step to take if you have a car loan. If you don’t have a loan, you’re done.

    If you’re behind on your vehicle payments, the lender can take back the car, even if an exemption protects your equity. You might be able to save it one of two ways:

    • Redeem the car. Pay the market value of the car to the lender in one lump sum.
    • Reaffirm the car loan. Sign a new loan that will remain in force after the bankruptcy is over and make up the payments in the new agreement.

    Understand, however, that while you have the right to enter a reaffirmation agreement if you’re current on your payments , the lender doesn’t have to agree to “modify” the loan in any way.

    So if you’re behind on your car loan before you file for Chapter 7 bankruptcy, and you don’t have the money to redeem it, you’ll be able to keep your car only if your lender is willing to work with you.

    To learn more about these options, see Your Car in Chapter 7 Bankruptcy.

    Read Also: How Long After Filing Bankruptcy Can You Buy A Home

    If You Want To Keep A Financed Car After Filing For Bankruptcy You’ll Have To Pay For It

    By Cara O’Neill, Attorney

    Many people are under the mistaken belief that filing for bankruptcy allows you to wipe out an auto loan while keeping the vehicle free and clear of any payments. It just isn’t true. Bankruptcy will unwind your obligation to pay back the loan. But if you don’t make the payment, you won’t be driving the car for long. So the short answer is noyou won’t get a free car in bankruptcy.

    Even so, it isn’t a given that you’ll lose it, either. In this article, you’ll learn what will happen to your car, and your loan, in bankruptcy.

    Here’s An Overview Of Your Options If You Want To Keep Your Car In Chapter 7 Bankruptcy

    Claim Bankruptcy, But Keep Your House & Car: Your Assets ...

    By Cara O’Neill, Attorney

    You don’t have to give up all of your property when you file for Chapter 7 bankruptcy. If you own a car, you’ll likely be able to protect a particular amount of the vehicle’s equity . If the equity value is worth more than you can protect, the bankruptcy trustee assigned to your case will likely sell it and distribute the nonexempt proceeds to your creditors.

    Additionally, if you owe money on the car and would like to keep it, your loan will need to be current, and you’ll need to be able to continue making payments after the bankruptcy case. Also, you must indicate to the court whether you intend to reaffirm the debt, redeem the car, or surrender the car .

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    Is Your Car Equity Exempt

    Each state allows bankruptcy filers to keep certain types of property up to a certain dollar limit. Almost all states provide some type of motor vehicle exemption. The amount exempted varies tremendously — it could be as little as $500 or as much as several thousand dollars . To learn how much the motor vehicle exemption is in your state, see Bankruptcy Exemptions: What Do I Keep When I File for Bankruptcy?

    If your equity in the car is significantly more than the applicable motor vehicle exemption amount, the trustee may sell your car, give you your exempt portion, and use the remaining proceeds to pay your unsecured creditors.

    In this situation, however, you may be able to use another exemption to make up the difference, get the trustee to accept other nonexempt property in return for keeping your car or pay the trustee the amount of the nonexempt equity of your car.

    Chapter 7 Followed By A Chapter 13 Bankruptcy: 4 Years

    Because a Chapter 13 typically involves paying most if not all what you owe creditors, you can file a Chapter 13 after a Chapter 7 sooner than trying to do consecutive Chapter 7 cases. If you receive a Chapter 7 discharge, you are eligible to attempt a Chapter 13 bankruptcy filing if at least four years has passed from the previous Chapter 7 case.

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    Impact Of Chapter 7 On Your Vehicle

    If you are filing for bankruptcy under Chapter 7, you may be able to keep your car by using the exemption for it. Most states provide a bankruptcy exemption of a certain amount for a vehicle. If you are no longer making payments on a car, and it has no equity beyond the exemption, you can protect it entirely. On the other hand, people who are still making payments on a vehicle will need to decide whether keeping it makes sense in their situation. They may choose to surrender the car rather than trying to keep up with payments. If you notify the court that you will surrender your car, this will get rid of your car loan.

    Some people need to choose between Chapter 7 and Chapter 13, which can involve evaluating many factors. If your car is an important factor, you can read more here about what might happen to your car under Chapter 13.

    Alternatives To Declaring Bankruptcyhow To Find Out More & What Might Be Available To You

    Want to Keep Your Car in a Chapter 7 Bankruptcy? Learn How.

    Most of the time when someone is experiencing financial difficulty, they think that if things dont improve theyll have to go bankrupt. The truth is that between financial difficulty and bankruptcy there are a lot of options. Our credit counsellors are experts at helping people explore these options and find the solution that will not only work the best for you today but will put you on the path to achieve you future goals.

    For some people, bankruptcy can prevent them from achieving future goals including some career paths. The nice thing is that there are often other options sometimes lots of them it all depends on your situation. The best thing you can do is make an appointment to speak with a credit counsellor, go over your situation with them, and see what your options are. If it turns out that bankruptcy is your best option, theyll layout your next steps for you and refer you to a reputable trustee.

    Were a non-profit service. So appointments with our credit counsellors are always free, non-judgmental, and completely confidential.;, or;chat with us online. You have nothing to lose.

    Fortunately, for many people who feel this way, there are other less severe options. Speak with one of credit counsellors to learn all your options. Theyll be happy to carefully review your whole financial situation with you and answer any questions you may have. Speaking with our certified counsellors is always free, confidential and without any obligation. Were here to help.

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    Secured Car Loans Or Leases And Bankruptcy

    If you lease a car, or there is a loan or lien registered against your vehicle, and if the loan is for as much as the vehicle is worth, the trustee wont take your vehicle.;You have two choices:

  • If your payments are up to date, you may continue to make your payments and keep your vehicle in accordance with the terms of your original loan or lease.
  • Your other choice is to stop making the payments and surrender the vehicle to the lender.; If you stop making payments prior to filing bankruptcy and surrender the vehicle, any resulting shortfall will be included in your bankruptcy.
  • Bankruptcy Exemption Limits And Your Car

    Second, if there is no car loan, you can keep the car if it is under the allowable exemption limits for your province. Each province has different exemption limits, so you should consult a local bankruptcy trustee to more information.

    In most provinces the exemption limit is around $5,000 $7,000, so if a car with no loans is worth less than that, you would be allowed to keep it. If the appraised value of the car is greater than the exemption limit,you could keep the car, but only if you pay into your bankruptcy estate the non-exempt portion.

    There are other factors to consider and each case is unique, so I suggest you for a no charge initial consultation to determine your options for keeping your car if you file bankruptcy.

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    Are You Behind On Your Car Payments

    If you are behind on your car payments and at risk for repossession, filing for bankruptcy will generate an automatic stay, which will stop creditors from repossessing the vehicle.; At this point you can discuss with a qualified bankruptcy professional options to keep your car. These options include negotiating with the creditor to get car payments caught up, redeeming the vehicle or treating the vehicle in a Chapter 13 plan ;at a lower payment and interest rate.

    The Colorado Vehicle Exemption Can Help You Keep Your Car

    Can You Keep Your Car if You File for Bankruptcy in Georgia?

    In most cases, you will not lose your car during your bankruptcy case as long as your equity in the vehicle is fully exempt. If you have taken out a loan that has been secured by your car , bankruptcy does not make that security interest go away. If you dont make your payments on that loan, the lender may be able to take and sell the car, during or after the bankruptcy case.

    If you are not behind on your loan payments, you may be able to keep your car if you agree to keep making payments and sign a reaffirmation agreement if required by the lender. You may even be able to negotiate a lower principal amount, based on what your car is actually worth. If you are behind on your loan payments, you may want to file a Chapter 13 bankruptcy petition. Chapter 13 bankruptcy may allow you to pay what your car is currently worth versus what your loan amount is. Chapter 13 also allows you to catch up on your back payments and bring the loan current.

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