Miami, FL asked in Bankruptcy for Florida

Q: Chapter 7 in Florida, my Car is paid for, Kelly Blue Book says 14K ..but I need a Car! What should I do? thank you.

I passed the means test, I am employed but currently receive Disability from employers LTD insurance. I know that Florida only allows for a $1000 Car, but I cant throw money out the Window to drive a junk Car that cost me more money in the end. The problem is that I paid the Car off in 2020. I know that was not smart. If I would get a title loan on the Car I am afraid with the high payments that I would loose it in the end anyway. I could trade it at the Dealer for a little Cheaper Car to get some money out to Pay the Lawyer for the BK. But what happens if the Trustee thinks that its still worth to sell a 4K Car? what should I do?

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2 Lawyer Answers
W. J. Winterstein Jr.
W. J. Winterstein Jr.
  • Bankruptcy Lawyer
  • Boyertown, PA

A: You are best advised to discuss these concerns with a Florida bankruptcy lawyer.

If the car is the only asset you have with reachable equity, you're probably safe and can keep the car (whether in a Ch. 7 or 13). If you have other assets that are not protected by the allowed exempt values under the Bankruptcy Code, an aggressive trustee might well want to sell the car with the other assets to enable him to make some distribution to creditors.

(Certain exempt values in each category under the Federal exemptions can be used to exempt other qualifying assets.)

Melissa Cain
Melissa Cain
  • Jacksonville, FL
  • Licensed in Florida

A: Hello -

If your vehicle is reporting a private sale KBB value of $14,000, then there is likely going to be an exemption issue. Under these circumstances a Chapter 13 filing may make sense - allowing you to keep your vehicle and pay off the equity over a period of time. It is possible that a Chapter 7 Trustee will work out a payment plan with you, depending on your budget, age of car, etc. It is best to discuss your best and worst case scenario with a local bankruptcy attorney. You can also have them explain what a Chapter 13 filing would look like in your situation.

I wish you the best of luck!

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