Cars More at Risk in Chapter 7 in Fort Lauderdale (Broward)

Chapter 7 Fort Lauderdale bankruptcy debtors will have a tougher time retaining vehicles that have value or equity. In Florida, debtors only have a $1,000 exemption against motor vehicles. (An additional $4,000 is available when the debtor does not receive the benefit of a homestead, but that’s a completely different issue).

A debtor with equity in a vehicle is subject to the chapter 7 trustee taking and selling the vehicle. The trustee is more than willing to accept a lump sum payment so the debtor can retain the vehicle. The issue is whether the chapter 7 trustee will accept payments over typically 6 months or will the trustee demand lump sum payment. There are three new trustees for Chapter 7 Broward County bankruptcies. Two of them who practice in that far and away location of Palm Beach County will require a lump sum payment. (They are concerned about liability if the debtor is in an accident during a payment plan. The trustee, they fear, could be considered as the owner).

Debtors must be aware of the risk of losing the vehicle with equity prior to making the decision to file chapter 7 bankruptcy. They need to be prepared to either pay the trustee from non-exempt assets or surrender the vehicle. Note that the trustee’s approach could be self-defeating. More debtors will file chapter 13 because they can have a 3-5 year payment and retain the vehicle.

So the new trustees will apply to a miramar bankruptcy, pemboke pines bankruptcy, a coral springs bankruptcy, pompano bankruptcy
plantation bankruptcy, as well as any other Broward County bankruptcy.

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