If you are having debt problems and are concerned about whether you will be able to keep your vehicle, one of the ways you can keep yourself in the driver's seat is by filing bankruptcy. We will discuss with you the options you may have if the car still has a lien against it, if the car is paid off, if the car is not worth the amount owed against it or any other scenario you may face.
At the law firm of Gross & Patterson, LLC, in Pittsburgh, our attorneys offer a free initial consultation to discuss your case and explain your options.
Bankruptcy Exemptions and Your Car
Your car, up to a certain value, is an exempt asset when you file bankruptcy in Pennsylvania. When an asset is exempt, the bankruptcy trustee cannot take it to pay your debts. The vehicle would still be subject to any liens a lender may have on the vehicle.
Under federal bankruptcy exemptions you can keep a car worth $3,450. You also have a wild card exemption that you can use to exempt a vehicle of higher value.
If you are making payments on a vehicle, you can keep the vehicle as long as you continue to make payments. If the amount you owe on the vehicle is more than the car is worth, you have two options when you file bankruptcy:
- Our lawyers can try to negotiate with your lender to reduce the amount you owe to the car's current value or go to court under certain circumstances to have the court determine the true value of the car in order to discharge a loan amount that is in excess of the value of the vehicle.
- You can give up the car and discharge the debt.
What if My Vehicle Was Repossessed?
Filing bankruptcy will put an immediate stop to a car repossession. However, if the car has already been repossessed, it may be too late to get your vehicle back.
When a bank repossesses a car, it typically sells the vehicle for a fraction of its value. It then holds the debtor responsible for any shortfall between the amount owed on the loan and how much it received for the car. As a result, you could owe thousands of dollars for a car you don't own any longer. Filing bankruptcy will allow you to discharge debt from repossessed vehicles.
For More Information About the Pennsylvania Bankruptcy Auto Exemption
To schedule a free initial consultation with a Pittsburgh lawyer who can help you keep your car, call 412-567-4732 or fill out the contact form on this website.
