A person will not necessarily lose their house, their car or their motorcycle if they file for bankruptcy. The bankruptcy laws allow debtors to take exemptions. If an asset is exempted, it is not used to compute the bankruptcy estate and is essentially protected from the proceedings.

Will I lose my vehicle if I file bankruptcy?

If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicle—as long as you’re current on your loan payments. They may also give you the option to pay off the equity at a discount in order to keep the car.

How many cars can I keep in bankruptcy?

Whether you can keep two cars in Chapter 13 bankruptcy depends on a number of factors. Learn more. You can keep two cars in Chapter 13 bankruptcy, but you’ll need to be prepared to show that you can pay creditors for any vehicle equity that isn’t covered by a bankruptcy exemption.

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…

What happens to your car if you file bankruptcy?

Can a person lose their house if they file bankruptcy?

A person will not necessarily lose their house, their car or their motorcycle if they file for bankruptcy. The bankruptcy laws allow debtors to take exemptions.

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.