Can i keep my car?!?!

[Bre26]

Hi all i am highly considering ch 7. My husband and i rent an apartment. My question is since we don't own a home, can i use the homestead deduction to keep my car? It is a 2008 CRV that is completely paid off. We live in Pa, and it is only i who will file, not both of us. Please help. I am a complete wreck over this whole situation.

[LadyInTheRed]

If you use Federal exemptions you can use $11500 of unused homestead exemption on any property. That is in addition to the $1225 wildcard that is not connected to the homestead exemption.

[Bre26]

Thank you so much! And it doesn't matter if it is paid off? Also, do you think chapter 13 would be better? I am afraid i won't be able to afford the payments. Congrats on your success, too!!

[Bre26]

I am just not sure which is better. My income is below the Pa average income, so i could be elig for ch 7, but i heard ch 13 better b/c you pay back some of your debts. I am just afraid the payments will be high and i will be worse off than i am now. This is taking 10 yrs off my life!!

[LadyInTheRed]

Don't drink the credit industry's Kool-aid! If you qualify for Chap 7 and have no good reason to file a Chap 13, then file a Chap 7. If you had non-exempt assets, then that MIGHT be a good reason to file a Chap 13 depending on the circumstances. Paying back some of your debts is not a good reason to file Chap 13 unless your income is so high that the law prohibits a Chap 7. Filing a Chap 13 when your income is low enough to qualify for Chap 7 is a recipe for Chap 13 failure because by definition you can't afford to pay any debt after covering living expenses.

The car being paid off does not keep you from claiming the exemption, it just mean you need the exemption to cover the full value of the car instead of the value minus the balance on the debt.

Read everything you can about bankruptcy so you can better understand the process. Watch out for information from sources who would prefer nobody file bankruptcy and tell you that filing will ruin your financial life forever. Make appointments to consult with a couple of bankruptcy attorneys. Most give free consultations. And, of course, keep asking questions here.

[Bre26]

Thank you so much...it helps to tall to someone who has been there and whi is knowledgable! I am nelow the median income for pa, so i will most likely qualify for ch 7. We really don't have any assets...we rent, have no coin collections or anything like that. My car is truly my only asset and my only means of transportaion to work. I have a consult scheduled with an attorney next week. I will keep younall posted. Thanks again for all your help!

[Bre26]

Sorry for all the typos..i am doing this from my cell