Keeping Multiple Cars in Tulsa bankruptcy

Keeping Multiple Cars in Tulsa bankruptcy - South Tulsa Bankruptcy law firmKeeping Multiple cars in Tulsa bankruptcy is possible if you think it through. From Route 66 to I-35, Oklahoman’s love their cars, trucks, and motorcycles.  We often have clients coming in to file bankruptcy who own more than one vehicle.  They want to know if they can keep both their daily driver and their motorcycle, work truck, classic car, or garage project.  Its a question of keeping Multiple cars in Tulsa bankruptcy. In most cases, the answer is yes but, it takes some doing.  Suppose we have a client, we will call him Jim, with two vehicles:  a 2012 Ford Focus, in good condition, with 60,000 miles on it that he drives daily, and a 2005 Honda motorcycle he rides on the weekends.

To determine which vehicles Jim gets to keep, we ask three questions:  how many vehicles does he own, how much are they worth, and how much value does he have in each.

Number of Vehicles Counts in Oklahoma Bankruptcy:

Keeping Multiple Cars in Tulsa bankruptcy depends on the number of vehicles involved. This is important, because according to the bankruptcy code 31 OS § 1(A)(13), each debtor gets an exemption in one vehicle up to $7,500 in value.  In a joint bankruptcy, this means that both debtors get a vehicle exemption.  Jim owns two vehicles, so we know he can almost certainly keep at least one of them right off the bat.

Next, we have to determine how much each vehicle is worth.  When we say “worth,” this means the selling price of the vehicle, based on the year, make, model, mileage, and condition.  For Jim, based on what we know, the Ford would be worth about $6000, and the motorcycle would be worth about $1500.  If we refer back to the previous question, we know for sure, now, that Jim will be able to keep at least one of these vehicles due to the exemption.

Finally, we determine how much value the client has in each vehicle.  Value, in this case, means equity.  So we take into account not just how much the vehicle is worth, but how much is owed on the vehicle to a secured creditor, such as an auto loan.  To figure out the value, we take how much the vehicle is worth, and subtract how much is owed.  Suppose Jim owes just $2,000 on his Ford, and his bike is paid off.  In that case, we would subtract the $2,000 owed from the Ford’s worth of $6,000 and come up with a value of $4,000.  But suppose instead that Jim owed $7,500.  In that case, the vehicle would have a value of $0.  In both of those cases, because the bike is paid off, it is worth the full $1500.

Which Vehicle Gets the Oklahoma Bankruptcy Exemption:

Once we know the value of each vehicle, we determine which one gets exempted.  The first priority is to ensure that the client has a daily driver.  If the daily driver is the vehicle with the most value, it gets the exemption.  However, in many cases, clients have little or no value in their daily driver because they owe close to or more than it is worth.

In that case, we exempt the most valuable vehicle, because they trustee will not take a car with little or no value.  So, for our client Jim, if he owes $2,000 on his Ford, we would exempt it, as it has a value of $4,000 and it is his daily driver.  In that case, the trustee might take his bike.  But if he owes $7,500 on his Ford, we would exempt the bike, because his daily driver has no value, and the bike is the most valuable vehicle remaining.

Contact a Tulsa Bankruptcy Lawyer for Information:

In conclusion, Keeping Multiple Cars in Tulsa bankruptcy is possible and all people can keep at least one.  Whether or not they are able to keep other vehicles depends on how much value each vehicle has.  If you are considering bankruptcy and own multiple vehicles, consult with a bankruptcy attorney and read our Tulsa bankruptcy information blog to determine what the value of your vehicles is, and what the best course of action for protecting them is.

 

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