Leeds, AL–One of the biggest concerns individuals have when filing for Chapter 7 bankruptcy in Alabama is whether they can keep certain assets. Because certain assets will go up for liquidation, it’s important to know whether things like your home, car, and other valuable assets are protected. This helps to avoid unpleasant surprises from arising after you file for bankruptcy.
So, is your car protected in bankruptcy or could you lose it? This and more is addressed down below.
Will I be able to keep my car after filing for chapter 7 bankruptcy in Alabama?
Yes, in most cases, you will be able to keep your vehicle when filing for Chapter 7 bankruptcy in Alabama. You’ll want to make sure that you are current with your payments, though. Under Alabama law, a debtor is entitled to maintain a certain amount of equity in an asset that is exempt from liquidation. If the amount of equity you possess doesn’t exceed the state’s limits, you likely can keep it.
Currently, Alabama’s bankruptcy code entitles you to keep $4,000 of your vehicle’s equity. These values can change so it’s always a good idea to consult with an Alabama bankruptcy lawyer when considering Chapter 7 bankruptcy as an option to lower your debt.
It’s important to understand that equity refers to the amount of the vehicle’s value that belongs to you. If you’re leasing or financing your vehicle, you may not have much equity in it just yet. This can be a good thing for you as the bankruptcy court uses this and not the vehicle’s fair market value (i.e. the price your vehicle would sell for today) to determine if you qualify to keep it.
In addition to keeping your vehicle, the bankruptcy court will also issue an automatic stay. What’s an automatic stay?
An automatic stay is an order the bankruptcy court issues that stops all creditors from pursuing you for unpaid debt. This means letters, phone calls, and emails should stop once the creditor has been informed you’ve filed for Chapter 7 bankruptcy. Automatic stays can help ease the stress you might be experiencing as you enter the bankruptcy process.
Filing for Chapter 7 bankruptcy often helps individuals eliminate a substantial amount of debt, however, not everyone qualifies to file. If you’d like to find out if you’re eligible to file for bankruptcy along with what assets you’ll be entitled to keep, contact Hill, Gossett, Kemp & Hufford, P.C. to speak with a Leeds, AL bankruptcy attorney.
Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.
Hill, Gossett, Kemp & Hufford, P.C. can be reached at:
2603 Moody Parkway, Suite 200
Moody, Alabama 35004
Phone: (205) 640-2000
7900 Parkway Drive
Leeds, AL 35094
Phone: (205) 699-5500
6441 U.S. Highway 11
Springville, Alabama 35146
Phone: (205) 467-2225
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