Can I keep my car?

If I file for bankruptcy, can I keep my car?can i keep my car in chapter 7 bankruptcy

This is a very common question asked of chapter 7 bankruptcy attorneys in Utah. Luckily, the answer is fairly simple. Under Utah Code Annotated (2012)  78B-5-506(2)(b) “An individual is entitled to an exemption, not exceeding $2,500 in value, of one motor vehicle.”

Put simply, a person filing chapter 7 bankruptcy can protect $2,500 in “Equity” in one vehicle. Consider the following example: you own a car worth $10,000 and your loan is $7,500. Your equity in the car would be 10000 – 7500, or 2500. Under section 5-506, you would protect the full 2500 with your exemption. However if you owned the car worth 10,000, your exemption protection would still only be 2500 and you would have 7500 in unprotected equity in your vehicle.

There are other options available for those with excess equity in a vehicle. Call today for information on how to protect your car in a chapter 7 Utah bankruptcy