Legal Question in Bankruptcy in Kentucky

My husband and I are upside down on a car we purchased almost three years ago. We owe $25k and it probably would only sell private party around $13k. We are currently two months behind on payments. Is there any option available in this situation to possibly get the loan amount decreased to the actual value of the car? The car is in both of our names. We are pondering letting it go since my husband will be declaring chapter 7 very soon. How would that affect me since I am on the note as well? We lost our home last year to foreclosure due to illness and are in a fairly challenging financial situation.


Asked on 2/25/10, 9:27 am

1 Answer from Attorneys
Gregory Napier Troutman & Napier, PLLC

To get a solid answer to your questions, a bankruptcy lawyer would need to look at your entire picture. However, if you obtain the car and the loan on the car more than 910 days prior to filing a bankruptcy, then in a Chapter 13 you can strip down the value of the value. In a Chapter 7, you would be looking at "redeeming" the car at fair market value which would require being able to come up with a lump sum. You cannot guarantee keeping the car in a Chapter 7. However, you may be better off in one even if you lose the car - that is where looking at the whole picture comes in.

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Answered on 3/02/10, 11:57 am


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