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Can I keep my car in a Chapter 7 Bankruptcy?

By Phoenix Bankruptcy Attorney on June 20, 2022

ARS § 33-1125(8) allows you to protect, “equity in one motor vehicle of not more than six thousand dollars. If the debtor or debtor’s dependent has a physical disability, the equity in the motor vehicle shall not exceed twelve thousand dollars.” If you are married, you can double this exemption and use it on the same car, or if you are a two-car family, use each exemption on a separate car.

So, how much equity do I have in my car? Let’s find out.

First, find out how much your car is worth. You can go to a reputable vehicle evaluation site, such as and enter the details of your vehicle. Select the value for Private Party. If have no loan on your vehicle, then the Private Party Value equals the equity in your car. If you have a loan, you simply subtract the Private Party Value from the payoff balance on your loan. The amount of equity will determine whether it is protected when you file chapter 7 bankruptcy.

There are other considerations where you have a loan on your car. One is redemption, where you may be able to pay the lender a lump sum to buy the vehicle. Another is reaffirmation, which involves signing another agreement to reaffirm your current loan. Before moving ahead, it is best to speak to an experienced Phoenix chapter 7 bankruptcy attorney to understand these options.

Posted in: Bankruptcy

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