Value Your Car For Bankruptcy
You can keep your car and file bankruptcy in most circumstances. The ultimate decision will be, “do you want to?” When I talk about keeping you car, I am talking about one you own or one you are making payments for. Leasing a vehicle? This will be a great time to walk away from the lease and get back into owning your transportation.
The process for deciding if you can keep your car and file bankruptcy is very similar to the analysis for keeping your house. The value of your car is the deciding factor. I like to use the online version of Kelley Blue Book. The law requires you report the replacement value of the vehicle. This is the price you can expect to pay when buying a similar car from a person such as yourself. Kelley Blue Book has three value thresholds:
1. trade in value
2. private party value
3. retail value
For your purposes “private party” value will be the number you need. This is the amount you could expect to pay in a private arm’s length transaction. Like seeing it listed in Craig’s List, going to the person’s house, and buying it on the spot. No warranty, No repairs. Strictly as-is. No recourse.
Value Your Car:
1. Navigate to Kelley Blue Book
2. Select year, make and model in “Used Cars”:
3. Enter the info for your car
4. Enter residence Zip code in the pop up window
5. Select your model
6. Choose you trim level
7. Choose “private party value”
8. Enter mileage and options
9. Select a condition level
10. Find the value for your car
Chapter 7 Bankruptcy Trustees tend to prefer using the NADA website to value your car. This is a site for auto dealers and tends to yield higher values which are good for them for a liquidation scenario in a chapter 7 bankruptcy case. If the Chapter 7 trustee takes a car and sells it at auction it will not yield anything close to the private party value. Auction values for cars are found in the Black Book. Those values are about 30% of trade in value.
In another post I give you a formula to determine it you can keep your car.
Picture by iStock.
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