Menu Location
${site.data.firmName}${SEMFirmNameAlt}
schedule a consultation
  • 866-665-8095 toll free
  • -or-
  • 734-418-0365local

Possible exemption for vehicle during bankruptcy

When Michigan residents file for bankruptcy, the court will review every aspect of their debts, income and assets. Allowances might be made for a vehicle, even if it was bought a short time before the petition was filed.

Because cash in a bank account could be directed toward the payment of creditors during a bankruptcy, the temptation to spend it on a vehicle might arise. The trustee reviewing a bankruptcy case will only allow an exemption for the vehicle purchase if it can be viewed as a necessity for the filer. A purchase could be deemed to have been made in good faith if the car is modestly priced and used. A brand new vehicle might be viewed as an extravagance perhaps meant to absorb cash.

The timing of the purchase matters as well Buying a vehicle immediately prior to filing could create a problem. A purchase might be defensible, however, if the person absolutely needed a vehicle. The trustee will want to confirm that the bankruptcy filer did not already own a serviceable vehicle.

A person struggling to pay bills might wish to discuss the options for bankruptcy with an attorney. Bankruptcy law might enable someone to stop foreclosure or reset loans to manageable payments. After reviewing the person's income and debts, an attorney could provide insight about which chapter of bankruptcy might offer relief. However, there are stringent eligibility requirements that must be met. Chapter 13 is designed for people who have a reliable source of income that can be applied towards the court-approved repayment plan.

No Comments

Leave a comment
Comment Information
brand footer

Jackson Office
209 E. Washington
Suite 258
Jackson, MI 49201

Toll Free: 866-665-8095
Phone: 734-418-0365
Fax: 734-663-9973
Map & Directions

Ann Arbor Office
6553 Jackson Road
Ann Arbor, MI 48103

Toll Free: 866-665-8095
Phone: 734-418-0365
Map & Directions

credit cards

back to top

<#if page.ID="Thank-You">