Car ownership allowance if car is paid-off?

[Jammed]

[Jammed]

Does anyone have any thoughts on this? This could have a big impact on how much disposiable income I have . . . and my payment amount.

[AngelinaCat]

Under the Federal Exemptions for Pennsylvania, you are allowed up to $3,225 for a vehicle. The State exemptions are extremely poor. You might be able to get by with the Fed Exemption for the working car.

For the other three that are old and/or are non-working, you would probably be declared an Asset case, because they would not be covered by any exemptions. But the trustee would then 'Abandon Interest' in them as being too old. From what you described, it certainly would not be worth the trustee's time and effort to try to take the three of them and sell them.

If the trustee does not abandon interest in them then you might be offered the opportunity to buy them back from the BK estate. But then you would have to decide whether they are worth that to you or not.

[MSbklawyer]

Does anyone have experience with whether car ownership allowance is permitted if you don’t have a car payment?

You are in the Third Circuit in PA. I don't think the issue has been resolved there yet. Ask your lawyer. At least two circuits, the Fifth and the Seventh, have held the answer to be "Yes", you do get the ownership deduction on the means test even if the car is paid for.

Here is an article on the subject: