Yesterday, new legislation was passed dealing with the equity in an automobile in a bankruptcy. Prior to June 22, 2006, an automobile was exempt from seizure if its value was greater than $5,650. For example, if the car was valued at $5,000 it was not seized by the trustee, but if it was worth $5,700 it was seized by the bankruptcy or the bankrupt had to pay the trustee the value of $5,700.
Under the new legislation, the first $5,650 is exempt from seizure. For example, if the car is valued at $5,700, the bankrupt person has to pay the difference of $50 ($5,700-$5,650) to the trustee.
This new wording will help people filing bankruptcy to keep their car, and help them get a fresh start.
To discuss your financial situation and develop a plan that is right for you, call the Windsor of Hoyes, Michalos and Associates at 250-8060 or email a question.
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