Can I File for Bankruptcy and Keep My Car?

side of a parked car

According to a 2020 Experian survey, Ohio ranked 6th in the nation for the number of bankruptcy filings. Interestingly, Ohio residents also had a higher average credit score than the national average of 710 and ranked 29th out of 50 for the level of personal income. Despite this, Ohio experienced bankruptcy rates at about ten per every 100 consumers, with an average overall debt of $70,488. If you are considering filing for bankruptcy as a means of getting the fresh financial start you need and deserve, you are probably concerned about whether you will be able to keep your car. Most of us need our cars to get to and from work, to run necessary errands, to take children to school and so much more. The thought of being without your car can be frightening and could leave you with no way to work and make a living. The issues surrounding bankruptcy and keeping your car—along with any questions you have—can be fully addressed by the experienced Horwitz & Horwitz bankruptcy attorneys.    

What About Bankruptcy and Keeping Your Car?

You should discuss whether you will be able to keep your car when you file for Ohio bankruptcy with your bankruptcy attorney before you make the final decision as to whether bankruptcy is your best option. The Horwitz & Horwitz attorneys have been helping Ohio residents in similar situations for many years. Centerville bankruptcy attorney Barbara Horwitz founded Horwitz & Horwitz with Jon Horwitz thirteen years ago. Between them, Barbara and Jon have more than 53 years of combined experience. We fully understand that you have many choices when looking for the best Ohio bankruptcy attorney. We also believe strongly that once you have spoken to our highly skilled attorneys who always go the extra mile to ensure a personalized experience, your choice will be clear. The issues surrounding bankruptcy and keeping your car can be fully explained by our knowledgeable bankruptcy attorneys. 

How Can You Keep Your Car When Filing for Ohio Bankruptcy?

If you own your car outright—and your name is on the title—you can claim an exemption under Ohio law in the amount of $4,450. If your spouse is also named on the title, you can double this amount, although you are each only entitled to claim the motor vehicle exemption on one car titled in your name.  You can also use the wildcard exemption unless you need it to protect something else.  If your car is valued higher than the total of the exemptions, under Chapter 7 you would have to pay the excess amount to the Trustee to be distributed among your creditors in order to keep the car.  You must not make any title changes to your vehicles before speaking with bankruptcy attorney Barbara Horwitz. In most situations, we can help you keep your car when filing for Chapter 7 bankruptcy. If you have an auto loan and you have made the decision not to keep your car when you file for Chapter 7 bankruptcy, we will state that you intend to surrender your car on your Statement of Intention and will turn your vehicle over to your lender when the time comes. If you have a lease rather than a car loan, you can reject the lease on your Statement of Intention. 

Concerning Keeping Your Car, Does It Matter Whether You File for Chapter 7 or Chapter 13 Bankruptcy?

It does matter whether you are filing for Chapter 7 or Chapter 13 bankruptcy regarding bankruptcy and keeping your car. If you have non-exempt equity in your car, you can protect the car and other valuable assets more easily under Chapter 13 bankruptcy than under Chapter 7 bankruptcy. When you file for Chapter 13 bankruptcy in Ohio, the trustee does not liquidate property with non-exempt equity, rather you pay the non-exempt value of your car as a part of your overall repayment plan. Under Chapter 13 bankruptcy, you can potentially reduce a high interest rate and can even reduce the principal balance of a car loan if the value of your car is less than the amount owed and you purchased the vehicle at least 910 days prior to filing Chapter 13 bankruptcy. This is known as a “cram down” and allows you to pay back a balance based on the current value of your car rather than your contracted loan balance, thereby decreasing what you owe and lowering your monthly payment. 

What if You Decide to Surrender Your Car?

If you and your attorney decide that surrendering your car is in your best interests, you will essentially give your car back to the lender who loaned you the money to purchase the car. Under Chapter 7, once you receive your bankruptcy discharge, any outstanding amount you owe on the car will be forgiven. Under Chapter 13, the lender will have a certain amount of time to sell the vehicle, and that amount will be deducted from the balance due.  The lender can then file a claim as an “unsecured” debt. You will determine when and how to surrender your car with your bankruptcy attorney so you don’t have to suffer the humiliation of the lender potentially picking up your car while you are at work, or at your children’s school. You will let the bankruptcy court and your lender know that you are surrendering your car on your Statement of Intentions, and then you will wait for the court to authorize the lender to repossess your car. You will then make the car available for repossession by either taking it to an agreed-upon location or allowing the lender to pick the car up at your home.  Most creditors will try to repossess the car a few weeks after receiving authorization from the court, but in some cases, the lender may wait until the bankruptcy case is closed. If you are concerned about bankruptcy and keeping your car, talk to an experienced bankruptcy attorney from Horwitz & Horwitz. 

How a Centerville Bankruptcy Attorney from Horwitz & Horwitz Can Help You with Bankruptcy and Keeping Your Car

If you are in Centerville, Springboro, Beavercreek, Miamisburg, or Kettering, and you are considering bankruptcy and keeping your car, Horwitz & Horwitz can help. There are significant advantages to working with a knowledgeable bankruptcy attorney who has years of experience, and who is honest and straightforward while providing you with highly individualized attention. When you call Horwitz & Horwitz, you will always speak with an attorney—we never hand you off to paralegals or other staff members. We understand that discussing your private financial matters can be extremely sensitive. At Horwitz & Horwitz, we strive to set you at ease from our first meeting, to provide you with the financial relief you desperately need. Contact Horwitz & Horwitz today.