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Bankruptcy and your car: Will you get to keep it?

We love our possessions, and when it comes to many of them, we have a practical need to keep them. It's due to the fear of needing to liquidate all of one's property that a lot of Washington residents will avoid the bankruptcy process until the last possible moment. However, the longer you wait, the deeper into debt you may get and the more difficult and time consuming your bankruptcy process can become.

Washington residents who are afraid of losing their possessions, should be encouraged by the fact that many of their assets will not be subject to liquidation. Bankruptcy does not seek to strip Washington residents of all their personal possessions. In fact, the goal of bankruptcy is to simplify your financial life by resolving debt and supporting you in keeping the various personal assets that you require to continue with your daily life.

If you're filing for Chapter 7 bankruptcy, for example, you may be able to keep your house and your car up to certain limitations. If you have a Lamborghini, you'll probably have to sell it, but if you have more practically priced vehicle, it's doubtful that you'll need to liquidate the automobile because bankruptcy laws recognize most Americans need their vehicles to continue carrying out their daily life tasks like working and running errands.

The bankruptcy exemption for vehicles in Washington is generally $2,500. However, it's important to note that every bankruptcy case is different. As such, it's important to look at the whole of your bankruptcy estate before making a determination about what can and cannot be exempt from liquidation. An experienced bankruptcy lawyer can be of valuable assistance in completing this kind of evaluation.

Source: Bankrate, "3 options to protect your car in bankruptcy," Justin Harelik, accessed June 08, 2017

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