Can you keep your car and file bankruptcy in Louisiana? One of the common misconceptions about filing for bankruptcy is that you will lose all of your property in the process. To the contrary, Louisiana bankruptcy laws allow debtors to protect up to $7,500 of equity in a car. This means that a car, owned free and clear, worth $7,500 or less is completely exempt from liquidation in a chapter 7 bankruptcy case. Even a car worth far more than $7,500 can be exempt under Louisiana bankruptcy laws if it is encumbered by a loan. For example, a $15,000 car with a loan of $10,000 is exempt in Louisiana. This is the case because the accumulated equity in the car ($5,000) falls below the LA car exemption of $7,500.
What happens in the event that equity in your car exceeds the $7,500 threshold? See: What Is the Rule With Cars and Bankruptcy? for more information. Louisiana bankruptcy laws can be complex. If you have questions, consult an attorney.