Your vehicle is an important tool for daily life. It helps you get to work and allows you to provide support for your family members as well. It is also a valuable asset, and you may worry about the possibility of losing it if you file for personal bankruptcy.
A Chapter 7 filing requires the liquidation of certain assets. Before the courts will discharge your unsecured debts, you will first have to sell off some of your property. You must report your property to the trustee managing your case, and they will handle liquidating the necessary property and using the funds to repay your creditors.
Can you protect your motor vehicle from liquidation in a Chapter 7 bankruptcy?
Yes, you can protect motor vehicles from liquidation
The Texas bankruptcy exemptions are surprisingly generous when it comes to real estate and personal property, including motor vehicles. You likely won’t have to worry about losing your vehicle or even needing to refinance it to withdraw some of its equity.
Every licensed adult in your home can potentially protect one vehicle as exempt property in your bankruptcy case. You, your spouse and your teenage children could each retain a vehicle. However, the value of those vehicles will count toward your personal property exemption. You can exempt up to $50,000 in personal property if you file on your own or $100,000 if you file jointly with a spouse.
For most people, the Texas exemptions are more than enough to protect their home and their vehicle, along with some of their other property. Those who collect vehicles may find that their collection is at risk of liquidation in bankruptcy proceedings, but those who simply need to protect their truck for their daily commute likely won’t have to worry about the loss of their vehicle.
Understanding how bankruptcy works can alleviate your fear
When you really understand what property you can protect and what might be vulnerable to liquidation, you are less likely to worry about the financial consequences of filing for personal bankruptcy. Learning more about the Texas exemptions for Chapter 7 bankruptcy may help you decide that it is time to go ahead with your filing.
