Legal Question in Bankruptcy in Illinois

Re: Can we keep more than one vehicle?

In Ch 7 's the trustee will abandon any interest in your vehicles if there is not more than $1,200 equity allowed per person in their respective car, and most times the car financier will want to re-affirm with you, but there is no guarantee. however if you think the cars are in doubt if the bank or finance company will let you re-affirm, you could force them under a chapter 13 plan to let you pay off the vehicles' lien , that lets you pay what you can afford and they cannot object as long as you pay them what the vehicle is worth retail. Best to discuss this with an experienced bankruptcy lawyer.

Re: Can we keep more than one vehicle?

Short answer -- If you file a joint bankruptcy under Ch. 7 it is likely you can "keep" both vehicles.

Under Illinois law you can exempt from creditors the equity in an automobile for up to $1,200. This "exemption" (bankruptcy term for property you are entitled to keep in spite of creditors after you file) can be used one time by each person filing in the case of a joint filing. For example, if you have a Buick and your spouse has a Lexus, you can each retain your respective cars if you owe more on the loans then the cars are worth. If you owe $7,000 on the Buick and the car is worth today about $8,000; then there is only $1,000 in equity and the exemption law allows for you to retain possession. In other words, the Bankruptcy Trustee cannot force the sale of the Buick to pay creditors. If however, the loan payoff for the Lexus is $10,500 and the value of the car is $16,000 then the $5,500 equity is in jeopardy. If this is your situation you could still be able to keep the vehicles by filing under Chapter 13 instead of the customary Chapter 7. The process becomes a little more complicated. I do not encourage my clients to file under Chapter 13 unless it is absolutely necessary. A good lawyer can file your case under Chapter 7 and file a motion to change your case into a Chapter 13 proceeding if it becomes necessary. Please feel free to contact me personally to discuss your particular situation in greater detail. ph (800) 303-0720