Will I be able to keep my vehicle in Chapter 7 bankruptcy?

I’m looking to file bankrupcy for $135,000 worth of debt and my only vehicle is worth $10,000. Can it be seized?

Asked on August 13, 2012 under Bankruptcy Law, Michigan


S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

There are exemptions you file with your bankruptcy to be able to protect various assets from creditors' claims.  There is an exemption for an automobile.  The amount of the exemption depends on whether you are using the federal exemptions or your state's exemptions.  You have to select either all federal exemptions or all state exemptions.  You can't use both.  Whichever gives you the larger exemption, you should claim.  If the exemption you select for the auto is not large enough for the value of your car, you may be able to use a remaining portion of an unused exemption or the wildcard exemption plus the auto exemption to protect your auto from creditors.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.