Can we keep both cars with negative equity if we file Chapter 7 bankruptcy? 12 Answers as of June 03, 2015

My family is doing a short sale. We will no longer be liable for 2 mortgages, but the 3rd is $90K, with a bank that has a history of being hard to negotiate with (they may only settle for 80% of the outstanding balance which is $72K). We lost about 30-40% of our income, therefore we did the short sale. We are seriously contemplating bankruptcy, but are hesitant if it means losing both cars. We already consulted with one bankruptcy attorney and she indicated we would only be able to keep 1 car. I looked on the Kelley Blue Book site ( and essentially we have negative equity in both cars using the Trade-In value. We would really just prefer to keep the cars and keep paying them even with bankruptcy. Is that possible? We are current on everything and both have a FICO score of >750.

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A Fresh Start
A Fresh Start | Dorothy G Bunce
The bankruptcy exemptions are only needed when a vehicle has equity. So if you owe more on both vehicles then they are worth, I don't see a problem keeping both vehicles as long as you understand that you must keep the payments current and may have to reaffirm the debt. If one person files, that one person is entitled to claim equity in one vehicle. If a married couple files jointly, each person may select one vehicle to claim an exemption in the equity. So it sounds like the bankruptcy attorney your consulted either didn't understand your question or isn't a bankruptcy attorney at all. This is one of the simplest issues a bankruptcy attorney must know.
Answer Applies to: Nevada
Replied: 6/3/2015
Ronald K. Nims LLC | Ronald K. Nims
If you have negative equity in each of them, you can keep a dozen cars. The only thing you can lose in a Ch 7 is an asset with positive equity (and no exemption) so it can be sold and the money paid to your creditors. Lots of attorneys say their bankruptcy attorneys that do one or two a year and don't have a clue. I'd advise you to find a different attorney.
Answer Applies to: Ohio
Replied: 6/3/2015
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
If you have no equity in the vehicles then you should have no problem keeping them. The trustee will have no interest in seizing them.
Answer Applies to: New York
Replied: 6/3/2015
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
If you are not eligible for ch7, think about ch13. The exemptions are different in each state so I can't answer that with a yes or no / but it does sound odd. The trustee can not sell an asset if he/she is the only one getting paid. You may find a different lawyer at NACBA. Org.
Answer Applies to: California
Replied: 6/3/2015
Law Office of Michael Johnson
Law Office of Michael Johnson | Michael Johnson
Kbb is not used by the bankruptcy courts. If you are not keeping your home, you will be able to use your wild card exemptions that should if you have any equity in the cars.
Answer Applies to: Florida
Replied: 6/3/2015
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    If neither car has equity, then what exactly is there for the Court (or more accurately, the bankruptcy trustee) to take? I'm not following where that person is coming from. If she's talking about you may not be able to afford paying both cars, that's something else, but assuming there's no equity, you have no ownership interest to begin with - so again, what's there to take? Unless there is a question as to the values of the car, such that there might be equity, I'm not seeing it. Also, just because you have some equity, that isn't the death sentence for the cars either - it still depends on how MUCH equity, and what other assets you have.
    Answer Applies to: California
    Replied: 6/3/2015
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    You probably would be able to keep both vehicles as long as the payments are manageable. Whether it makes sense to do that is an entirely different question.
    Answer Applies to: Colorado
    Replied: 6/3/2015
    Danville Law Group | Scott Jordan
    You can keep both cars if you have enough exemptions to cover the equity in both. The KBB value you should look at is private party sale in fair condition, unless you can show the care is in poor condition.
    Answer Applies to: California
    Replied: 6/3/2015
    Tokarska Law Center
    Tokarska Law Center | Kathryn U. Tokarska
    This question was posted in "California Bankruptcy" and I'm licensed and have practical experience only in that jurisdiction. I'm not sure why the attorney told you that you can only keep one car if you have no equity in both vehicles. This doesn't make sense to me. I suggest you get a second opinion. Also, I assume that you spoke to someone who handles taxes and determined that it's in your best interest to do a short sale because they have determined what the tax implications will be and they won't be any or what there is you can handle. Also, if a short sale is actually going to happen it can only happen if all lenders agree, that includes the 3rd mortgage. If you do a short sale, I assume that you have additional debts and that is the reason for heading into bankruptcy. I also assume that you have discussed chapter 13 option with a bankruptcy, including lien strip of any mortgages that are 100% unsecured as far as equity - this assumes the property is a residence. I think it would be wise for you to get another consultation.
    Answer Applies to: California
    Replied: 6/3/2015
    Law Office of Barry R. Levine | Barry R. Levine, Esq.
    Probably. No equity or exempt, a trustee's interest is minimal.
    Answer Applies to: Massachusetts
    Replied: 6/3/2015
    Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
    Unless there is some special circumstance you have not mentioned, you should be able to keep both cars, so long as you are willing to pay for them. As to the mortgage business, you might be able to void the secured status of the third (or perhaps also the second) mortgage in a Chapter 13 bankruptcy. You should definitely consult an experienced bankruptcy lawyer promptly. Good Luck.
    Answer Applies to: Wisconsin
    Replied: 6/3/2015
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    You have a number of options. Pay an experienced BK lawyer for some advice. I have successfully filed THOUSANDS of BK's, so there are any number of options available to you in a Chapter 7.
    Answer Applies to: Colorado
    Replied: 6/3/2015
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