Today’s question gets asked in many variations, but the gist is the same: how can I keep my things and still file bankruptcy.
Question: I have a $65,000 Mercedes that I bought two years ago and I was wondering if I am obligated to give it up in order to pay my creditors. It has a lot of sentimental value.
Yes, there are about 65,000 sentimental reasons to want to keep the car. But the answer is “no, you can’t keep the car most likely.” I say “most likely” because there are some issues that bear on the answer. First is whether the car is paid for or not. The question doesn’t say there is money owed, so we’ll assume it’s paid in full. In that case the trustee can seize the car, sell it, pay the owner his or her $3,000 vehicle allowance and use the remainder to pay creditors. That’s the essence of bankruptcy. A debtor surrenders her property, all except that which is exempt or which the trustee abandons, and in exchange receives a discharge.