Florida bankruptcy attorneys are noticing a recent trend in used vehicle values actually increasing in South Florida. Chapter 7 bankruptcy trustees in Broward County, Florida have been successful in selling used cars from debtors’ bankruptcy estates for 10-20% more than the Kelly Blue Book value.

It is important to be aware of this trend because it may affect your use of Florida’s bankruptcy exemptions, and your ability to exempt your vehicles from liquidation during a Chapter 7 bankruptcy. A debtor who files bankruptcy in Florida is allowed to exempt $1000.00 worth of equity in his or her vehicles. (Caveat: debtors may apply their $1000.00 personal property exemption and $4000.00 wildcard exemption, if eligible, toward their vehicles as well). However, if a debtor’s vehicles have equity after exemptions have been applied, the bankruptcy trustee may liquidate the asset and use the non-exempt portion of the asset’s equity to pay creditors.

Until recently, it was a fairly safe bet to rely on Kelly Blue Book values to determine the equity in a bankruptcy debtor’s car and to plan exemptions accordingly. Now however, debtors or their bankruptcy attorneys should allocate 10-20% more than the Kelly Blue Book value or be prepared to make an offer to the bankruptcy trustee to buy back the vehicle if the debtor wants to keep the vehicle.