Will you be able to keep your car if you file for bankruptcy in Louisiana? In most cases, the answer is yes!
First, in any bankruptcy proceeding, the debtor can keep the items of property that he owns that are “exempt” from seizure.
Louisiana has its own set of exemptions as do many other states.
Under the Louisiana exemptions, a vehicle that is used for transportation for employment is exempt up to a value of $7,500.00.
So what if the car is worth more than $7,500.00 or if I own more than one car? What will happen?
The answer will depend on the value of the car and also on whether there is a collateral mortgage (lien) on the car.
If a car is of little value, the trustee may not believe that it is worth the trouble to seize the car and sell it. So if the car is an older, high mileage car, the trustee may find that it is “not worthy of administration”.
Also, if a car already has a mortgage on it, then the car will usually not be of any value to your unsecured creditors, since the car is often worth less than is owed on it. This is often referred to as the vehicle being “encumbered beyond its value”.
You should meet with an experienced bankruptcy attorney to discuss the treatment of your vehicles.
by Kevin Gipson, New Orleans, Louisiana bankruptcy lawyer.