Have you been wondering if you can keep your car in Ohio and file bankruptcy? In a chapter 13 case it is not an issue. When you file bankruptcy the real question is, “do you even want to keep it?” In a previous post I addressed the reasons you might not want to keep your car. This discussion includes automobiles, trucks, vans and motorcycles. Ohio law says tractors are not motor vehicles.
There are some real and valid reasons you might want to hold on to the bucket of bolts:
- It’s paid for. This is an option I really like that is not available on all cars!
- You love it.
- It is in top running condition
- It is reliable
- It is your name, but it belongs to someone else
What considerations go into the decision to keep the it? First you need to know it’s value. Second you need to know the current balance of any liens on the vehicle. This is lawyer talk for, “How much do you owe?” This is a real good time to pull out your title to make sure that the lien for the loan shows on the title. Subtract the loan balance from the value. If you owe more than the value, you are home free. You can keep it.
If there is some equity in the car there is still hope you can keep it. Next you have to subtract the Ohio motor vehicle exemptions from the net equity amount. Currently Ohio law allows an exemption of $3,450 in ONE motor vehicle. There is also a “wild card “exemption of $1,150 you can aggregate among assets.
You can utilize $4,500 in exemptions against the car’s net equity. When this amount covers the total value, it is not an asset in which the trustee will have an interest. If there is more than this amount of net value you may have to pay the trustee to buy that amount of equity back from the bankruptcy estate. In this situation you might surrender the car to the bankruptcy trustee. That way when he sells it, you get the first $4,300.00 to put down on something shiny and new. I know this is not keeping the car and filing bankruptcy, but it may just be a better choice.
One thing I didn’t mention is the loan. If you want to keep the automobile, and there is a loan against it, you will also need to continue paying the loan. You might also be called upon to sign a reaffirmation agreement for the loan as well.
Picture by 1001 nights found at istock photo.