Chapter 7 bankruptcy.
I have a Ford F150. It has a loan against it at $31000. The truck was heavily damaged in the course of my work and apparently only worth $16k at most, by Kelly Bluebook "fair" condition. The title and the loan are in my name and an ex girlfriend's name. In course of the bankruptcy, I believe I can claim the truck under some exemptions. And then there is the USC 522(f), as my truck is used heavily in my tradework.
My question is: How will my ex's name being on the loan and the title play into the bankruptcy? And how can I get her name removed from them in clearing the debt WITH the bankruptcy? What are my options?
1 Answer from Attorneys
Your best option is to work with an experienced bankruptcy attorney.
You have no need for any exemption because you have no equity in the truck. The Trustee isn't going to want it. However, it doesn't make much financial sense to try to keep a truck worth $16,000 because even if you file bankruptcy you will have to pay $31,000 for it. You might be able to pay only $16,000 for the truck in a Chapter 13 if the loan is more than 910 days old, but if you are going to file a Chapter 7 you might as well just surrender the truck and get a different vehicle. You cannot discharge the debt AND keep the vehicle. Things just don't work that way.
If you file for bankruptcy, YOUR debt will be discharged and the creditor cannot seek money from you (only take the truck). However, unless your ex also files bankruptcy, the creditor can seek to make her pay anything that is still owed on the vehicle after the vehicle is surrendered or repossessed.
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