In most cases you may be able to keep your car when filing for bankruptcy protection and debt relief. In a Chapter 7 bankruptcy in order for you to be able to keep your car, you must understand the whether or not if there is non-exempt equity in the car. If your car has no equity, a bankruptcy trustee will not take the car. To determine the equity of your car, subtract any car loan and exemption from the car’s present sale value. If the number you calculate is a negative number, than there is no equity in the auto.
If your car does have equity or the current value of the car is above the loan amount or the value of any exemptions, a debtor pursue any unprotected equity from the Chapter 7 trustee.
What if you still owe money on the car and want to keep it after the bankruptcy? If you still owe money on your car, you may opt to “reaffirm” the debt to the secured lender. This enable you to keep the car and continue paying under the existing terms. You may also buy the car from the secured creditor in a single payment for its present value which is called redemption.
Lastly, you are allowed to surrender the vehicle and eliminate the obligation to pay for the auto.
For answers to all of your Kansas bankruptcy questions, call Koehn & Tahirkheli Law Firm, L.L.C. for a free initial bankruptcy consultation with a Liberal Kansas bankruptcy attorney at (620) 624-8158. Our attorneys serve the cities of Liberal, Garden City, Sublet and all other communities located with Seward County, Finney County, and Ford County, KS