In Chapter 7 bankruptcy, most or all of your debts are discharged. In exchange, the bankruptcy trustee is allowed to sell your nonexempt property and use the proceeds to pay your unsecured creditors. If the equity in your car is exempt, you can keep your car.

What is exempt in personal bankruptcy?

Exempt property (items that a debtor may usually keep) can include: Motor vehicles, up to a certain value. Reasonably necessary clothing. Reasonably necessary household goods and furnishings. Household appliances.

Can You Keep Your Motorcycle if you file bankruptcy?

Filing bankruptcy doesn’t mean you have to give up your motorcycle, as long as the motorcycle payments would be considered a reasonable vehicle expense. Occasionally clients tell me something like, “I was told if I filed bankruptcy, I would not be able to keep my motorcycle.” This is one…

Can You Keep your car in Chapter 7 bankruptcy?

The motor vehicle exemption helps you keep your car, truck, motorcycle, or van in Chapter 7 bankruptcy by protecting equity in a vehicle. By Cara O’Neill , Attorney Many people worry that they’ll lose everything if they file for Chapter 7 bankruptcy , but it’s not the case.

Can a motorcycle be paid off in Chapter 7?

The motorcycle is just a toy, and allowing the toy to be paid off in the plan reduces the amount the unsecured creditors receive. The easiest way to determine whether a motorcycle will be viewed as an allowable expense in Chapter 7 or Chapter 13 is to ask: is it a toy, or is it a reasonable vehicle expense.

Can a motor vehicle be exempt from bankruptcy?

Motor Vehicle Exemptions. Both federal law and most state laws allow bankruptcy debtors to exempt some equity in a motor vehicle when filing for Chapter 7 bankruptcy. This is often called the motor vehicle exemption. Some states require that you use the state exemptions; others allow you to choose between the state and federal exemptions.