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St Louis Bankruptcy: What Is The Main Reason Why Someone Might Lose An Asset When They File For Bankruptcy?


First of all, if you end up “losing” an asset through a bankruptcy, it will almost assuredly be a Chapter 7. And if you lose an asset in a Chapter 7, it is because the asset had a great deal of equity.

Normally, the assets that you own can be protected by way of certain “exemptions” that the state provides to cover any equity that might exist. Your St Louis bankruptcy lawyer would know which state exemptions to use for which assets.

For instance, the state of Missouri provides a “Household Goods” exemption of $3,000 (if you are an individual filer) and $6,000 (if you file jointly with your spouse). This exemption covers all of your odds and ends (such as pots and pans), furniture, tv’s, etc. The value that you give to these items is “garage sale value”. In other words, what would these items fetch if you were to sell them in a garage sale. Most of the time, the state exemption will more than cover the value of this stuff.

But what about your bigger assets, like a house or a car? This is where the state exemptions become very important. Missouri provides a “Motor Vehicle” exemption that resembles household goods (3K for an individual filer, 6K for a joint filing). If the value of your car exceeds that of any lien against it, then you do in fact have equity in the car.


So for example, if you own a car that has a loan balance of $10,000, and the value of the car (according to Blue Book) is $12,000, then there would be equity of $2,000 (12000 – 10000 = 2000). As mentioned above, the state exemption for a car is $3,000. So in this example, the exemption would more than cover the equity in the car. This means that (assuming you wanted to retain the vehicle) you can keep the car and continue making payments on it.

What would happen if there was a great deal of equity in the car? If you have a vehicle that has a ton of equity (that cannot be exempted by way of a Missouri state statute), then it is probably not a good idea to file a Ch7. Because if you do, the Bankruptcy Trustee would want to take the car, sell it, and use the proceeds from the sale to pay back your unsecured creditors.

But that is exactly what we want to avoid!! And that is why it is so important to speak with an experienced St Louis bankruptcy lawyer! We can describe how the entire process works, answer all your questions, and guide you through the process step by step!

The affordable St. Louis bankruptcy attorneys at The Bankruptcy Company have been saving and protecting people’s assets for years. Our goal is to make sure that you keep the assets and property you want, discharge the debts that you want to get rid of, and do it all at an affordable cost to you. All phone conversations and office consultations are free of charge.

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