When filing for bankruptcy in Phoenix, there are specific details you should know in order to determine the value of assets are safe and cannot be taken by creditors. For example, you may wonder whether you will be able to retain more than one car or one house if you go through a bankruptcy. This type of question is one of the reasons that most people should be encouraged to seek the counsel of an experienced bankruptcy lawyer who knows line-by-line what the law allows and disallows. Unfortunately, not everyone fully understands the potential disaster that can ensue without proper legal advice and representation. Unnecessarily, many people end up losing valuable assets by choosing to “go it alone” in the court system without adequate knowledge or legal assistance.
In a bankruptcy it is fine to give a figure for personal property based on “garage sale” value. However, for any real property involved, it will be necessary for you to determine the market value of the property. This determination should be made on the value of the property in its current condition. For example, in deciding what the fair market value of your home is, do not set the amount at a figure that your house would be worth if you replaced the roof or fixed the leaky plumbing in the basement. It is advisable to find out the most recent assessment figure determined by the county. Additionally, you need to ask yourself, “For what price are other homes in my general area currently selling?”
For a motor vehicle, the current condition of the automobile or truck is the determining factor for the value placed on this property. It is important to take into consideration whether the vehicle has ever been involved in an accident, no matter if it was eventually repaired or not. A vehicle that has been wrecked loses value quicker than one that has not. Another factor in determining car value is the existence of present damage to the interior or the exterior of the automobile. Of course any value figures given by a source such as the Kelly Blue Book or NADA can be important, as well. Remember though, the figures given in these sources do not necessarily reflect an exact picture of your particular vehicle’s worth.
If there is no large amount of equity in any particular asset, most likely there will be no problem retaining the asset. In Arizona, the state allows an exemption of $6,000 on an automobile. So you will be allowed to deduct or “exempt” up to $6,000 off the existing equity in the vehicle. As an example, if you owe $10,000 to the bank for your car or truck, but you have determined that the fair market value equals $16,000, then there is technically no equity in your vehicle according to the bankruptcy court rules. Because you are able to deduct $6,000, that brings the value down to $10,000. But you owe that amount to the bank, so you have no equity built up in the vehicle which could be taken by creditors.
Since there will be nothing that the bankruptcy court Trustee can do with your vehicle, you will be able to keep it. Depending on which type of bankruptcy you have filed, you will probably be able to simply continue making payments, or the vehicle loan will become a part of the payments you make monthly to the Trustee in a chapter 13 bankruptcy case. Of course, it is best to check with your legal counsel to determine the exact specifics of your case. Because bankruptcy law is rather complex, an attorney who is well versed in the law and has proper experience will be an ally who can steer one’s bankruptcy case correctly and smoothly through the legal system. An initial consultation is the best way to determine a clear path for your situation.
Finding the Right Bankruptcy Lawyer in AZ
You may still be able to keep nonexempt property depending on the circumstances. If you are filing Chapter 7 or Chapter 13 bankruptcy, you need an experienced Arizona bankruptcy lawyer on your side. This can be a daunting process. Ask friends or family members for a legal referral.
Give Phoenix Fresh Start Bankruptcy Attorneys a call at 602-598-5075 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.