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If I Own More Than One Automobile, Can I Keep Them All When I File For Bankruptcy?

This is a possibility, but as in all other areas of bankruptcy law, it depends on a few pertinent factors. There is nothing wrong with owning more than one car or truck, but it is the Bankruptcy Trustee’s job to look into and examine all of your assets to determine their condition, status, and value. In some circumstances, the Trustee may wish to liquidate the automobile or ask that you guarantee its value to your unsecured creditors. Knowing when this might happen is very important when you file for bankruptcy, but then that is why hiring an attorney who knows the Bankruptcy Code inside and out is so vital.

When you file a Missouri bankruptcy, the court requires that you disclose your ownership interest in all assets. This would include all cars, trucks, real estate, bank accounts, stock options, accounts receivable, executory contracts, leases, and personal property (such as clothes, books, appliances, and furniture). Once all property is properly disclosed, it is then necessary to assign a value to them. In the case of personal property, you are able to use garage-sale value (in other words, What would your clothes sell for at a garage sale / yard sale? Probably not much.) This garage-sale value is almost always covered by the exemptions that the government gives you to protect such property. But in the case of a major asset like a car, the court is going to want something a bit more solid than just your guess as to its garage-sale value. Depending on what the year, make and model of the car is, the fair market value can be determined in a few specific ways. Most notably the NADA or Blue Book. Of course, the condition of the automobile and the number of miles plays a factor in the car’s value as well. If the car or truck in question does not have significant value (or value that can be eliminated by way of an available exemption), then you may keep the car. So for example, if you are currently financing a 2009 Chevrolet Cobalt with a loan balance of $15,000, there is a good chance that there is no equity in the vehicle; you would simply reaffirm the debt with the creditor, and continue to make monthly payments on the note.

But if you own a great number of vehicles (two or more), then it may be necessary to justify why you own so many. If you are a household of two (ex. you and your spouse), then both of you owning automobiles is fine (and maybe even if you own one more just as a backup). But if you there are more cars or trucks that you have in your possession, it becomes necessary to explain why. Sometimes its related to the type of work that you do for a living. For instance, if you are a contractor, it wouldn’t be terribly unusual for you to own a work-truck. But if you are a household of one (just you living by yourself), and you own two cars, a truck, and a motorcycle, the Trustee is probably going to argue that one or more of those vehicles are strictly for your entertainment, and therefore a luxury item. This may in turn lead to either liquidation of the asset in a St. Louis Chapter 7 bankruptcy, or a large guarantee of money to the unsecured creditors in a St. Louis Chapter 13 bankruptcy.

Either way, figuring out what is best for you starts first and foremost with finding the right attorney for the job. The affordable St. Louis bankruptcy lawyers at Brinkman & Alter, LLC have been keeping our clients informed and up-to-date on their rights and options for years. Our goal is to lead you through the process from start to finish, and get you the fresh start / clean slate that you deserve.

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