CHARLESTON BANKRUPTCY AND A VEHICLE EXEMPTION
CAN I KEEP MY CAR IF I FILE BANKRUPTCY IN S.C.
One of the concerns of someone who is about to file bankruptcy is can a debtor keep a car or truck? The exemption available to you does not help you with a lien that you have voluntarily put on the vehicle. What are the rules regarding an exemption regarding your vehicle?
The vehicle should be titled in your name although it has sometimes been possible to claim an exemption in a vehicle that is not titled in your name. This is because the South Carolina Code of Laws Section 15-41-30(A)(2) says that a debtor may exempt the “debtor’s interest”. Title is not necessary, but, if a creditor wants to claim that a debtor does not have an interest in the vehicle, the first step in the fight would be that title is not in the name of the debtor.
A debtor can only claim an exemption in one motor vehicle. The term motor vehicle can encompass many types of vehicles. Cars, trucks, vans, motorcycles, scooters can all be exempted, but, a debtor may claim an exemption in only one of them. For that reason, when a debtor owns more than one vehicle, it is common to claim the exemption in the vehicle with the most equity.
Equity may be value left after the lien on the vehicle or it may be equity on a car that has no lien on it. The exemption is up to $5,625.00 as of July 1, 2012 and the exemption can be doubled if two debtors own the vehicle.
A decision must be made whether to even use the exemption. If a debtor cannot afford the payment on the vehicle and the payment cannot be reduced to an affordable amount, then abandonment of the vehicle to the creditor with the lien on it may be the best bet.
Too often, a debtor will say that they have to keep the car to get to and from work. That is a legitimate concern with the pathetic public transportation available in the Charleston, South Carolina area. However, if you cannot afford to pay the payment on the vehicle or the reduced payment that can sometimes be obtained in a Chapter 13 bankruptcy case, then do not make the payments on the car and use the money you save to pay for a car with cash.
It is usually better to have a car that you are having to work on all the time than no car at all. If you do not make the payments, you will probably lose the car in the future. At that point, you probably will be unable to scrape together enough money to pay cash for any car.
Putting together a future sometimes means giving up things now. Is keeping a car worth not being able to save for retirement, not being able to take a vacation, having to tell your children that they cannot be on the team or keeping you or your spouse from taking courses that will increase family income in the future?
Call me, Nathan Davis at 843-571-4042 or email me at firstname.lastname@example.org to determine where you are, where you want to go and the best way to get there.