When you file a bankruptcy you must list all of your assets and all of your liabilities. A majority of the time, you would use your state law exemptions to protect any equity you have in your vehicle, home, and assets. Any unexempt equity (meaning any equity you have in property that is not covered by the allowable exemptions) would become part of your bankruptcy estate. A competent lawyer in your area can advise your of the options and determine whether chapter 7 or chapter 13 would be a better option for you.
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If your car is paid off - has no liens/loans against it - you would need to apply the bankruptcy exemptions of your state to protecting the value of the vehicle.
If your car does have a loan against it, you would list the creditor in your bankruptcy, and state your intentions with the loan on the bankruptcy forms. Your creditor may require you to sign a reaffirmation agreement in order to allow you to the keep the vehicle.
It is always a good idea to consult with a qualified bankruptcy attorney when you have assets that need protection. Hope this helps!
Legal disclaimer: Ms. Singh is a California-licensed attorney only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation. Contacting Anudeep Singh or the Stone Haven Law Group does not constitute legal representation, nor is any information you provide protected by attorney-client privilege until otherwise advised.
A very common misconception of bankruptcy is that you will lose all your assets and everything you own will be repossessed and sold off. This is far away from what actually happens. Bankruptcy laws are designed to give debtors a "fresh start" after a financial crisis or unforeseen event, not make them destitute for the rest of their lives. Although, you will need to disclose on your bankruptcy petition the fact that you own a vehicle, it is possible to use state or federal exemptions to shield it from the creditors. In fact, most of Chapter 7s are "no-asset" cases. This means that debtors get to keep ALL of their property and still have their unsecured debt completely wiped out. Go to speak to an attorney who is licensed in Maryland... If the only asset that you're worrying about is your car, something tells me that you will have more than enough allotted exemptions to keep your vehicle. Good luck.
If you can keep your car payments current you will very likely be able to keep your car. In filing bankruptcy you will have to list all of your assets and all of your debts, so there is no discretion whether to put the car "in the bankruptcy", but that's just as well. The bankruptcy process is always easier when you fully disclose all of the aspects of your financial condition.
I've attached a link to a video I uploaded about the impact of honest disclosure in your bankruptcy case. I hope you find it helpful.
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