Many people believe that filing for bankruptcy means that they will lose everything. However, bankruptcy is a form of debt relief, not asset relief. The law allows you to exempt certain items when you file for bankruptcy protection, including your car. Whether this is the best option for you depends on your unique situation.
What are the exemption amounts, and what does that mean for me?
Ohio law allows for several property exemptions in a bankruptcy proceeding. Each asset is assigned a specific dollar amount. In 2019, the dollar amount for a car was set at $4,000.
If the value of your car is higher than the exemption amount, the vehicle is not exempt. Things become more complicated if you have an auto loan. You may reinstate your auto loan after filing for bankruptcy. However, if you owe more than your car’s value, it might not make sense to continue with the loan. But you should also consider how difficult it may be to find a replacement vehicle.
Find the debt relief option that is right for you
As you can see, it is possible to keep your car if you file for bankruptcy protection. Whether the ultimate cost is worth it or not is something that you should carefully consider. Discussing your situation with a skilled professional can provide you with the information you need to make the choice that is best for you.
Remember that are different chapters in bankruptcy. If a Chapter 7 filing is not right for you, a Chapter 13 filing may be a better fit. Also, there may be other debt relief options outside of bankruptcy that is better suited to your situation.