Will I Lose My Car if I File Bankruptcy in Kansas?
By Jill Michaux, Kansas Bankruptcy Attorney on Sep 23, 2007 in Discharge, What Can and Cannot Be Forgiven, General Bankruptcy Information, Kansas, Protecting Assets In Bankruptcy, Surrendering Property
Kansas exemption law shields a $20,000 car from seizure by your bankruptcy trustee. That means you can keep your car when you file bankruptcy if your car is worth less than $20,000.
You may also keep your car if it has a lien on the title and has less than $20,000 in equity (the difference between the value and the lien balance). And, there is no dollar limit for vehicles designed or equipped for “handicapped” persons.
Reflecting our state’s rural heritage, Kansas law protects all kinds of “means of conveyances” such as trucks, motorcycles, horse and buggys, boats, or airplanes, so long as you use it as your primary transportation. In a joint bankruptcy case, each person can claim a vehicle exempt from the trustee.
While the Kansas exemption law protects your car from the bankruptcy trustee, it does not protect your car from a lien creditor. If you have a lien on the title, you still have to pay the lien creditor if you want to keep the car. The lien remains on the car after bankruptcy even if your promise to pay the debt was discharged, which means the lienholder may repossess your car if you don’t pay the debt.
Claiming exemptions in bankruptcy is tricky. Your bankruptcy attorney will advise you what property can be exempted in your case. People who file a bankruptcy on their own without an attorney, frequently make mistakes claiming exemptions and lose property to their bankruptcy trustee.
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