A common question that I receive when a client files a bankruptcy is whether the Trustee is going to take the debtor’s car and sell it for the benefit of creditors. In Florida, only $1,000.00 of equity is exempt from creditors.  Many times cars are upside down, so there is no need for this analysis.  However, many times a car is fully owned by the debtor and is worth several thousand dollars.  Even in this case, a trustee will usually not have a sheriff levy the car.  The reason is there are a lot of costs that go into taking, holding and selling a car.  First a Trustee will have to pay a Sheriff to levy the car, will then have to pay storage costs to store the vehicle, then will have to pay advertising costs to properly advertise the car pursuant to Florida Statutes, and then will have to pay an auctioneer to sell the car.  Additionally, this will be a fire sale and the car will  most likely only sell for a portion of the price that it is actually worth.  Of course, the sheriff, the auctioneer, the storage company and the advertising company will all be paid before any distribution can be made to the creditors.  Additionally, the debtor will receive the first $1,000.00 of any sale.  Therefore even if a car is “worth” $9,000.00 according to Kelly Blue Book, it is doubtful that the trustee will order the sale of the car as the costs clearly outweigh the benefits.  Usually, a debtor will be able to work out a deal with the Trustee in situations where cars have considerably more than a $1000.00 in equity.  This analysis can also be used for other personal positions within a debtor’s home. 

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