For the majority of Americans, your vehicle is your lifeline to employment and income, not to mention, picking up groceries, transporting children to school, and paying the utility bill. When you are faced with massive debt and need to declare bankruptcy, keeping your vehicle is highly important. Thus, numerous individuals visiting Ohio bankruptcy attorneys for the first time are curious as to what will happen to their car if they file bankruptcy. Ohio bankruptcy law, under the motor vehicle exemption, allows debtors to use bankruptcy to shed debt while keeping their automobile whether they own it or not.
Can I Keep My Car?
“Can I keep my car in bankruptcy” is one of the most asked questions of Ohio bankruptcy lawyers, as well as, internet search engines. With over 49 million results on Google alone, it’s safe to say that it’s a natural concern. Except in extreme cases, debtors in Ohio are able to exempt (protect from bankruptcy sale) up to $3,675 for one vehicle and up to $1,250 in additional exemptions using the wildcard exemption. What this means for the average consumer is that as long as your vehicle is worth well over $5,000 dollars in value, you will be able to keep your automobile in bankruptcy.
Tools of the Trade Exemption
Additionally, if you use your vehicle for work, you may be able to qualify for another $2,400 in tools of the trade exemption. This exemption is also used to protect books and other implementations that you need for your trade, occupation, or business.
Reaffirmation of Vehicle
How your vehicle is treated in bankruptcy also depends on if you own the vehicle or if it is collateral for a secured auto loan. If you do still owe money on a vehicle loan, you essentially have three options: let the vehicle go back to the bank, pay the loan balance off in full, or reaffirm the loan (resign a new loan contract). Which you do depends on your bankruptcy goals, but many individuals are actually able to find better terms by renegotiating during the reaffirmation process.
Protecting your Car in Bankruptcy
An experienced Dayton bankruptcy attorney specializes in Ohio bankruptcy laws and has experience saving automobiles from being liquidated in bankruptcy commonly. Discussing your options, exemptions, and other factors that may affect your overall bankruptcy process with a bankruptcy lawyer is a crucial first step in eliminating debt while keeping your vehicle.