Legal Question in Bankruptcy in California

Car lien avoidance

If my auto is considered exempt as ''tool of trade,'' but I still owe $4000 on it as a purchase money loan, is there absolutely no way I can avoid the lien in a Chapter 7?


Asked on 4/15/04, 4:26 pm

2 Answers from Attorneys
Robert F. Cohen Law Office of Robert F. Cohen

Re: Car lien avoidance

Your misunderstanding of the mechanics of bankruptcy is a common one. You exempt a certain amount to keep your equity in the vehicle out of the clutches of -all- of your creditors.

The amount you may owe to the auto lender is a different issue. You can discharge that amount if you choose to return the vehicle. You may not have to reaffirm the loan and simply can continue to drive the vehicle (usually) if you continue to pay the loan. The loan is secured by the vehicle, so either you continue to pay or you give it (or they take it) back.

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Answered on 4/15/04, 4:46 pm
Alvin Tenner Law Office of Alvin G. Tenner

Re: Car lien avoidance

Cohen gave the best answer.

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Answered on 4/15/04, 7:12 pm


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