QUESTION
If I have an RV or motor home, all payments are on time and no equity, and it is financed, can I keep it if I file for chapter 7?
Asked on Dec 16th, 2014 on Bankruptcy - Colorado
11 ANSWERS
Derek W. Freeman
That depends on if there's equity in the RV. If not, then you will definitely be able to keep it, because the trustee won't be able to get anything from the sale of the RV. If there's equity, then you will have to use an exemption to cover it. In Colorado, you will have to use the motor vehicle exemption, or, if you actually live in the motor home, you can use the homestead exemption. If you've used your exemptions on other vehicles, then you'll end up losing the RV.
Answered on Dec 19th, 2014 at 10:52 AM
Debt Settlement Attorney serving San Diego, CA
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Law Offices of Kathryn Tokarska
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If there is no equity, meaning the loan balance exceeds the value, there should not be a problem. That is usually the case with RVs purchased new since they tend to depreciate heavily. If there is equity, it will depend on how much equity there is and whether you can cover that equity within an exemption. This may also depend on what other assets you have and how much those are worth.
Answered on Dec 17th, 2014 at 6:48 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Yes, can keep it. As long as all payments have been on time, the lender can't repossess it (lenders can repossess only if you're behind in your payments - bankruptcy doesn't change this) The trustee can't take it away (to sell and pay his fees a lot and your creditors a little) because there is no equity in the RV/motor home, You will have the opportunity to reaffirm the debt on the RV/motor home - I advise my clients not to reaffirm when they are current on the payments. That way, if you later decide you don't want the RV/motor home; you have the right to walk away from it.
Answered on Dec 17th, 2014 at 5:00 PM
It would depend on 1) whether you have any equity in the vehicle (FMV minus balance under contract) 2) whether you live in it and claim it as your homestead. If you have equity, state law defines what you can keep. You can keep a homestead, but you must live in the property and claim it by recording a declaration with the county recorder. If the item has a motor, you could in the alternative, claim any equity in it as a motor vehicle, but expect a challenge to this claim from the trustee.
Answered on Dec 17th, 2014 at 11:34 AM
Probate Attorney serving Friendswood, TX
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Law Office of Melissa A. Botting
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If the RV or motor home is your homestead, you may be able to keep it. If it is a second or recreational vehicle and has any appreciable equity, you will most likely have to surrender it. You will need to look at an appraised value of the property, consider your payments and look at your budget. if you can afford the payments, are you over the threshold to be eligible for a Chapter 7.
Answered on Dec 16th, 2014 at 11:34 PM
Yes, but you may not be able to reaffirm the debt since the judge must say whether it benefits you. Still as long as you pay, you can keep it.
Answered on Dec 16th, 2014 at 6:39 PM
Consumer Bankruptcy Attorney serving Los Angeles, CA
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Orantes Law Firm
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If you otherwise qualify for Chapter 7 relief, you would only have a problem if the payments are too large and it would appear that you could pay some percentage to your unsecured debts if you did not spend that money. If you live in that vehicle, that would not be a problem. Otherwise, there are too many potential factors to give you a definite answer or other advice without a formal consultation.
Answered on Dec 16th, 2014 at 6:39 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Most probably but I need the details and your need counsel for a firm opinion.
Answered on Dec 16th, 2014 at 6:38 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Generally, the answer is yes.
Answered on Dec 16th, 2014 at 6:34 PM
You would have to demonstrate in your monthly budget that you can afford the payments, and you might have to explain to the trustee why you need it if the payments are more than a few hundred a month. Otherwise, it could be viewed as a luxury item that you cannot afford.
Answered on Dec 16th, 2014 at 6:34 PM
Deborah F. Bowinski
It will depend upon what your annual income is and whether you have a means test issue. The payments on the RV are not deductible on the means test, at least not in Colorado.
Answered on Dec 16th, 2014 at 6:34 PM