One major concern clients have when making the difficult decision of whether or not to file for bankruptcy is their primary means of transportation; in other words, their motor vehicle. In most cities in the United States, having a vehicle can make the difference between being able to get to work consistently and maintain employment or not. Having a reliable means of transportation can be your lifeline. Attorneys receive many questions such as, “Do I get to keep my vehicle if I file bankruptcy?” and, “Will I be able to purchase a new vehicle.” Unfortunately, the answer is always, “It depends.” But what does it depend on?
One of the main considerations taken into account when your Trustee decides whether or not you get to keep your vehicle is whether your vehicle has any equity in it. The next consideration is whether or not you have exempted that equity. In Florida, you are only allowed to exempt $1,000.00 of equity in a motor vehicle per debtor. However, there could be other ways to protect more equity. If you are leasing your vehicle or took out a car loan to purchase that vehicle, and you currently owe your lender the full value of the vehicle or owe more than the vehicle is worth, then you can most likely keep the vehicle simply by reaffirming the lease or loan. Continue reading →