In figuring out what to do with a car in bankruptcy, the most important issue is, not surprisingly, the value of the car. Once you determine the private party Kelley Blue Book value of the car, the next step is determining the amount of your equity. If you subtract the amount that you owe on the car from the private party value of the car that will give you a good idea of what your equity is in that vehicle. In most cases, you can protect your car using the allowable bankruptcy code exemptions. The bankruptcy courts in both
If you live in
You car lease cannot be paid through the Chapter 13 bankruptcy repayment plan that you devise with your bankruptcy attorney. You can “assume” the lease and continue making the monthly payments. You can “reject” the lease and return the car to the creditor. The creditor will sell the leased vehicle, apply the sale proceeds to your lease balance and then file a claim in your Chapter 13 bankruptcy case for the lease deficiency. This deficiency is an unsecured, non-priority claim, which means you will likely only pay that creditor pennies on the dollar.