Bankruptcy consultation: Does Mississipi bankruptcy law allow me to keep my car?
Considering filing for bankruptcy in Mississippi but concerned that you may lose your car? One of the biggest myths about bankruptcy is that when you decide to file for bankruptcy you are also deciding to part ways with all of your property. In many cases, this is simply not true. For example, Mississippi bankruptcy laws allow debtors to protect up to $10,000 of personal property through a wildcard exemption. While Mississippi bankruptcy laws do not specifically provide an exemption for cars, the $10,000 wildcard exemption can be used to protect a car from the bankruptcy trustee.
How does the Mississippi car exemption work? It shields equity in your car from your creditors and the bankruptcy trustee. While “equity” can be a foreign concept for many automobile owners, you can calculate equity in a car by subtracting the amount of your car loan from the appraised value of your car. This number (which may very well be negative) is the focus of the car exemption. If you have equity below $10,000, you will likely be able to keep your car while shedding burdensome debt through the bankruptcy process.
For example, let’s say Bill from Oxford owns a Ford F-150 with an appraised value of $15,000 and an $8,000 loan. When we subtract the $8,000 loan from the $15,000 appraised value, we see that Bill has $7,000 of equity in his truck. If he were forced to file bankruptcy, he could allocate $7,000 of the Mississippi wildcard exemption to protect his truck and prevent it’s sale by the trustee. In other words, Bill could file for bankruptcy and keep his car.
RECENTLY MOVED? A recent move may impact which state’s bankruptcy laws apply to your case.
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- Exemption Laws: Your Shield Against Creditors
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- Nevada Bankruptcy and Your Home
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