A court-appointed trustee is basically put in charge if a person files for bankruptcy. This trustee will be responsible for handling your assets, estate, and other things that concern your wealth. Generally, a trustee is made up of an impartial third party. They are tasked to oversee or double-check the selling process or liquidation of all your non-exempt assets. Applicable to all states, bankruptcy laws technically allow one to choose and hold on to exemptible assets, provided that these assets are approved by the federal laws and the state as well; and that includes your car. Every consumer must be knowledgeable of placing values on a car declared for bankruptcy, this is because the federal Bankruptcy Code approves car exemptions based on the equity of the owner, and depending on the car’s market value as well. For a more comprehensive approach to determining values, try to consult reliable vehicle valuations online such as the Kelley Blue Book and the National Automobile Dealers Association or NADA.
There are bankruptcy courts in the United States that only credit values from NADA, but policies may vary from one state or district to another. If you consult a skilled bankruptcy attorney, you’ll be informed fully about which online guide for car valuations is prescribed by most trustees and courts. To use the websites properly, try to input as much information of your vehicle as possible. Afterwards, try to navigate to the used car prices page to accomplish the questionnaire. Make sure you have the information about the car’s model, make, mileage, and other features handy so you won’t have to flip through pages and spend time doing so. After you have determined the value of your car, print the results and keep it for reference when you file for bankruptcy.
There are three categories involved in the NADA guide, they are rough, average, and clean. On the other hand, the Kelley Blue Book offers retail, trade-in and private party values. Refer to Chapter 7 for bankruptcy policies, according to that, the law requires you to determine the retail value for your car. If you car needs repairs or polishing, let an auto mechanic or specialist take a look at it. You can then subtract your overall cost for repair in the values from Kelley Blue Book or NADA guides.
To calculate the vehicle’s equity, subtract any amount that you haven’t yet paid for the vehicle from the overall market value. For automobiles, the Bankruptcy Code allows up to $3,225 as an exemption value. If the equity for your car is more than what’s indicated above, you have the choice to pay the amount beyond the exemption value, address this payment to the bankruptcy trustee so you can then keep your car. Now if you own an antique or vintage car that has more than the approved exemption value, the bankruptcy trustee will most likely take the car, sell it, and pay back your creditors. Try to continue paying for whatever you owe on the car if you want to keep it just after you file for bankruptcy. Your lender may have to forfeit your car if you fail to come up with the required payment.