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Can I Keep My Car if I File a Chapter 7 Bankruptcy?

Unfortunately, many Americans are unaware of how specific financial mechanisms can impact their lives. At no fault of their own, the extreme complexities that arise when attempting to file for bankruptcy, for example, leave people with more questions than answers. To get a better understanding of how a Chapter 7 bankruptcy claim influences large personal assets such as automobiles, reach out to a consumer protection lawyer from Sharmin & Sharmin P.A. as soon as possible. 

Chapter 7 Bankruptcy: Can I Keep My Car?

What Exactly is a Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy is the most common and quick type of bankruptcy filing. The processing of such a claim is done through “the means test,” an eligibility criterion that will determine if someone is or is not qualified to apply for bankruptcy. This usually takes four months to half a year and is completed with the issuance of a discharge. It is important to note, however, that the process is not the same for everyone, and a failure of the means test does not completely disqualify someone from filing for bankruptcy. 

Surrendering and Keeping a Car with a Chapter 7 in Florida

Despite popular belief, it is possible for someone to retain their car under a Chapter 7 filing. According to Florida law, someone is able to file for an exemption of a portion of the equity of the automobile itself. The success of this motion may depend on a series of circumstances and situations. However, should an exemption be allowed, someone may determine the amount of equity they have in the vehicle. Should the individual have an excess of unprotected equity after the subtraction of allowed exemption and what is owed, this amount would belong to the bankruptcy estate. 

Individuals filing for a Chapter 7 bankruptcy also have the right to surrender their car, should they so choose. This is most often the case when someone owes a much larger amount of money on the vehicle than it is worth. Should the value of a car have depreciated over time but large amounts of money are still due to loans, it may be in someone’s best interest to surrender their car. 

There are still alternative options for Chapter 7 filers, however. A reaffirmation agreement would mean that an expired contract on a car that still has money owed is brought back to life, allowing the borrower to continue making monthly payments on it. Furthermore, someone may choose to redeem their vehicle by selling it to the court for its current value. This may be met with a hearing, but can be successfully managed by an experienced attorney.

Navigating the Complexities of Asset Management in Florida 

A Florida bankruptcy lawyer from Sharmin & Sharmin is thoroughly trained in managing clients’ assets after a Chapter 7 declaration. Due to the difficulty and complications of this area of law, a trusted law firm is necessary for success. Call the Sharmin & Sharmin offices today at 1-844-Sharmin, where you will be given a free consultation so that our attorneys can determine how to best move forward with your case.

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