Have Multiple When Filing Bankruptcy?
If you have multiple vehicles when you file bankruptcy, it's likely you'll be able to keep them thanks to bankruptcy exemptions. When you file bankruptcy you are entitled to exemptions that can help protect automobiles. The exemptions are available at different levels including state and federal. While there are exemptions that can help protect personal property such as vehicles, exemptions may cover equity up to a certain amount.
Exemptions are available in most states but you'll want to review what is available in your state with your attorney. Whether you have a vehicle paid off in which you have the full title or you're making payments, you may be able to protect a certain amount of equity, if not the entire amount. An exemption may be used for one vehicle per person when filing, but if you have more than one vehicle you may be entitled to use the wildcard exemption.
The wildcard exemption can help protect what may not be covered under state or federal exemptions. For example, if the total value of your vehicle is $4,000 but the state only offers protection for up to $3,500, the wildcard exemption may help protect the remaining $500. The same scenario if you have 2 vehicles; if state exemptions only protect one, you may seek to use the wildcard to help protect the other.
Keep in mind the situation may vary depending on which bankruptcy chapter you file. If you are still making payments on the vehicle it's likely there isn't equity available; meaning you'll be able to keep the vehicle as long as you continue payments.