Can a trustee take a vehicle if you want to reaffirm?

[frogman1]

Hello all,

I am considering Ch 7 in North Carolina and have a question regarding vehicles and reaffirmation. I currently own 2 vehicles

Vehicle #1: 2013 Dodge Charger, 151,000 miles, NADA value $2,395. I own this out outright and have the title.
Vehicle #2: 2004 Chevy Silverado Duramax, 163,000 miles, NADA value $11,525. I owe $3,873 on it leaving me $7,652 in equity.

Ideally I would like to keep vehicle #2 and reaffirm the debt. NC has a $3,500 vehicle exemption I could apply taking it to $4,152.

Is there any way the trustee would let me reaffirm and keep the higher value vehicle or am I just dreaming?

[justbroke]

You can reaffirm so long as the creditor agrees and it's in your best interest. Whether or not you should reaffirm is a question which most of us here at BKforum answer in the negative; we don't recommend reaffirmation except in narrow circumstances. Not reaffirming doesn't mean that you have to return the vehicle except with a few creditors (Ford Motor Credit, Toyota Motor Finance (?), and most credit unions).

Your real issue will be do you have enough between the motor vehicle exemption ($3,500) and the unused homestead exemption ($5000) --- combined with other exemptions -- to protect the equity in both vehicles. For example, the motor vehicle exemption for NC is for one vehicle only.

Your question was "Can a trustee take a vehicle if you want to reaffirm?" and the answer is yes. All property becomes property of the Estate. Trustee's will usually not touch property that is encumbered (has a loan), but may look at encumbered property where there is unprotected equity. The problem will be that juicy $4,152 in equity. You can negotiate with the Trustee to purchase the equity. Or, you could use just about all of that unused homestead exemption ($5,000) which may put other property in jeopardy of liquidation by the Trustee.

Bottom line is protecting the equity in vehicle #2 so that the Trustee can't get to the equity. But you must balance your exemptions to cover all your property that you want to keep.