Can I Keep My Car If I File for Chapter 7 Bankruptcy in Louisiana?
Can I Keep My Car If I File for Chapter 7 Bankruptcy in Louisiana?
Filing for Chapter 7 bankruptcy can be a powerful way to eliminate debt and start fresh, but many people worry about losing important assets, like their car. In Louisiana, whether you can keep your vehicle during the bankruptcy process depends on factors such as its value, equity, and your ability to protect it using exemptions.
At De Leo Law Firm, LLC, we provide legal assistance to the Louisiana public, helping individuals navigate the bankruptcy process while safeguarding essential assets.
How to Keep Your Car During Chapter 7 Bankruptcy
- Using Exemptions
- Louisiana law allows you to exempt up to $7,500 in equity for a motor vehicle. Equity is calculated by subtracting the remaining loan balance from the car’s current value. If your equity is within this limit, you can likely keep your car.
- Reaffirming Your Loan
- If your car is financed, you can enter into a reaffirmation agreement with your lender. This means you agree to continue making payments under the original loan terms to retain the vehicle.
- Redeeming Your Vehicle
- You may "redeem" the car by paying its current market value in a lump sum, which is useful if your loan balance is higher than the car’s value.
- No Equity or Fully Covered
- If your car has little or no equity or is fully exempt under Louisiana law, you can usually keep it without further action.
When You Might Lose Your Car
- If your car’s equity exceeds Louisiana’s exemption limit, the bankruptcy trustee may sell it to pay creditors.
- If you’re behind on loan payments and cannot reaffirm or redeem the car, the lender may repossess it.
How De Leo Law Firm, LLC Can Help
At De Leo Law Firm, LLC, we:
- Evaluate your financial situation and the value of your car.
- Help you use exemptions to protect your assets.
- Guide you through reaffirmation or redemption agreements if needed.
Contact Us Today
Filing for Chapter 7 bankruptcy doesn’t have to mean losing your car. Contact De Leo Law Firm, LLC for expert legal assistance and personalized guidance to help you navigate bankruptcy while protecting your most important assets.
