Vehicles under Chapter 7.....

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I've been reading over Chapter 7 exemptions for Georgia, can someone explain the roles of cars in a Chapter 7.

We have;

2000 Maxima, worth about $15k, we owe $17k.

1997 Altima, PAID for, worth $5k retail, but about $2900 trade in

1983 280zx, PAID for, worth about $500.00 (if that)...busted transmission

Can anyone of the vehicles be taken from us. We have to have both, one for my wife to drive to work, and one for me, I work 40 miles away from home. No way to share a vehicle.

The exemption for Georgia says :

Automobiles in the aggregate value of $3,500.00,

Any help would be greatly appreciated. We will probably see an attorney within the next 2 weeks, but can anyone answer that question for me....we are under stress and I hate waiting!



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That means that the total equity of all vehicles allowed to be exempted is $3500. If the Trustee thinks the value is more than that, he/she could try to grab it, but you would also be able to redeem it - pay the Trustee the difference to keep it.

Get a blackbook quote on the 1 good car, you might squeeze the equity in. No way he'll take a non-running vehicle as old as that Z.

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Thanks once again LadyNRed, we will not be including any of the cars in the BK, and I would say the wholesale value of the car is probably less than $3500, we paid $5000 for it this year and paid cash for it. But, it was my mother-in-laws car, so we knew that she kept it clean and tidy...the going price for the car was probably around $4500 at the time. We own the car outright. The attorney we are working with is a friend of ours, so I'm sure he will make sure all is well before we take the plunge. I guess I don't understand how someone could take something from us that we own outright.

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First lets clear something up - you can not EXCLUDE any debt or asset from a bankruptcy. You must include ALL debts and all assets on your schedules. If you plan to keep the financed car, then you can reaffirm it (if you must in your state) and that will exclude it from the DISCHARGE, it does NOT exclude it from the bankruptcy.

The reason a Trustee can take something you own outright is because you have 100% equity in it. That 100% equity is an asset that could be liquidated to pay your creditors and Ch 7 IS a 'liquidation of assets' bankrutpcy. Most people lose nothing because of the exemptions. Congress did not intend to put people on the street with nothing to live when it drafted the bankruptcy laws, so they provided exemptions. If your assets go over those exemptions you either REDEEM them by paying the Trustee the value to keep it, or you surrender it so the Trustee can liquidate it.

Since you're upside down on the financed vehicle, theres no equity to exempt. The paid for car is another matter and the exemption will have to be applied to keep it.

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