Question: Can I keep my car if I file bankruptcy?
I really have to file bankruptcy soon. I started a business in Johns Creek and it didn't work out. I put a lot of the debt on my credit cards and I took out loans that I personally guaranteed. Now I can't make all of the payments. I'm getting letters and calls from my creditors. It's like they are harassing me all day.
Since the business went bad my wife actually got fired from her job. She gets unemployment. And I think we may get divorced because of all the stress.
I started drinking again and got a DUI about a month ago. I can't afford a DUI lawyer. But now I'm getting counselling from a psychologist and a friend said he'd lend me money to start another business.
I really need a car and want to keep my car. It's about 12 years old and needs some work but it's reliable. It's a Japanese compact car and the air conditioning stopped working about 2 years ago. Can I keep the car if I file a bankruptcy?
We live in Johns Creek and our kids to the local schools.
Answer: The vast majority of people who file bankruptcy, whether a chapter 7 or chapter 13, can keep their cars. A car, however, can become an issue if it has a high value or the monthly payment is very high. The majority of bankruptcy filers have no issue because their automobiles are of average value and their monthly car payment is reasonable.
Since your car is 12 years old compact and a Japanese product, it would be highly unlikely that there would be any issue with its value.
We have had a client who owned a new Ferrari and that was a problem. Another client had a monthly car payment for his Aston Martin that exceeded $2,500.00 per month; that was an issue. Most people, of course, do not own wildly expensive exotic automobiles.
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