My Car is Paid Off can I Still File For Bankruptcy in Florida

I often get clients who come to my office who ask me if they can still file for bankruptcy if they have a car that is paid off or paid for.  The answer is YES having a vehicle that is paid off does not prevent an individual from filing for bankruptcy in Florida but it may change the type of bankruptcy the debtor will file.

Vehicle Valuation

For Chapter 7 bankruptcy your vehicle is valued using BLACKBOOK valuation, not Kelly Blue Book, not CarMax and not what the dealership will give you.  Blackbook is a subscription service that your bankruptcy attorney should have access to in order to determine your vehicle valuation.

For Chapter 13 bankruptcy the Miami trustee uses CarMax valuation and the Broward/Palm Trustee uses Blackbook valuation.

Exemptions for Cars
In Florida a debtor is allowed to protect $1,000 in a vehicle and if the debtor doesn’t own a house or is surrendering the vehicle then they are eligible for an additional $4,000 wildcard that they can use to protect any other asset they own (including the vehicle).

Chapter 7 or Chapter 13
Your vehicle’s value will help you determine what bankruptcy option is the best for you.  If your vehicle value is protected using exemptions then Chapter 7 may be a good option but if your vehicle is not fully protected by exemptions then you may want to consider filing for Chapter 13.  An experienced Bankruptcy Lawyer can assist you in determining your best option.

The Bankruptcy Court Won’t Take My Car
I don’t know how many times I’ve heard a client tell me that their friend said that the bankruptcy court won’t take your car if it is your only car and you use it to go to work.  FALSE, if your car is an asset and you have no protections for it, the bankruptcy court WILL TAKE YOUR CAR.  Please remember that filing for bankruptcy is voluntary and you should be aware of any consequences that are associated with filing.

If you are thinking of filing for bankruptcy in South Florida and would like to speak with an experienced Chapter 7 and Chapter 13 bankruptcy attorney then please contact Shmucher Law, PL and attorney Ofer Shmucher.  We offer free consultations seven days a week and can be reached at 954-309-5559 or 305-741-5553.

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