People often do research on bankruptcy online, and some of the information they find out is entirely incorrect. One of my favorites is when a client tells me that they read online that the bankruptcy court will NOT take your car away if it is your only mode of transportation. What they are reading is ENTIRELY UNTRUE. The fact that your vehicle is your only mode of transportation makes no difference as to whether or not you will be able to keep your car if you file for bankruptcy. There are only three things that matter, regarding your car,
- The value of the car – Use Kelly Blue Book (Private Party) or NADA Private Party
- The amount of equity you have an a car – Subtract the value of the car in number one by the amount you owe on the car. If it’s positive you have equity, if it’s negative then there is no equity.
- Your available Florida Exemptions to protect any equity in a car.
Florida Exemptions
Own a Home and Keeping it
Under Florida Law a debtor who owns a home and is keeping the home is entitled to exempt $1,000 in anything they want and an additional $1,000 in a vehicle.
Own a Home and Surrendering it or Rent a Home
Under Florida Law a debtor who owns a home but surrenders it in bankruptcy or a debtor who rents can exempt $5,000 in anything they want and $1,000 in a vehicle. The debtor can use the $5,000 to protect the vehicle.
So if you own a car and you have excessive equity (ie you own the car outright) and can’t exempt all of the equity in the car, then you are left with TWO choices: Either pay the difference or Surrender the car to the bankruptcy.
If any attorney tells you that they won’t take your car away BECAUSE IT IS YOUR ONLY CAR…. I suggest you run away, because your attorney is telling you false information.
If you are thinking if filing for bankruptcy and would like to schedule a free consultation with a local bankruptcy attorney then please contact Ofer Shmucher at Shmucher Law, PL by calling 305.741.5553 or 954.309.5559. Shmucher Law, PL offers free consultations in any of our Bankruptcy office locations including Boca Raton, Fort Lauderdale, Miami, Plantation, and Sunrise Florida.