Chapter 7 bankruptcy is one of the most popular choices for individuals and families who are facing overwhelming debts. However, not everyone can qualify for Chapter 7 bankruptcy. In order to be eligible, you must be able to show that your current income and assets, when measured against your expenses, are not sufficient to realistically pay off your debts without assistance.
If you qualify for Chapter 7 bankruptcy, you will benefit from significant debt discharges, which is why this chapter is such a popular option. However, you will also have to liquidate the vast majority of your assets in order to pay off your debts.
Many people depend on their car in order to get to work and earn an income. Therefore, the prospect of needing to liquidate this asset is a common source of concern in Chapter 7 bankruptcy. If you are worried about whether you will be able to keep your car, it is important that you understand the bankruptcy exemptions in place.
Car and automobile exemptions in Chapter 7 bankruptcy
You have the right to keep your car as long as it does not exceed a certain value. However, if you have multiple cars or luxury cars, it is likely that they will have to go through the liquidation process along with other assets. In 2010, the motor vehicle exemption was capped federally at the value of $3,225.
If you want to go through bankruptcy, it is important that you understand the exemptions you will be able to benefit from. Having full knowledge regarding the rules in Washington will probably put your mind at ease.
