1. Bankruptcy Can Get a Repossessed Car Back
There is a law in bankruptcy that requires all the creditors involved to be treated equally. One thing that happens in a case is the trustee goes back 90 days to see what creditors have received payment. If one creditor has received payment that is substantial, the trustee can get it back and have it included in the bankruptcy estate.
These payments are called "preferential payments", and are barred by bankruptcy law because they benefit one creditor more than the others. If a creditor has just repossessed your car, and you file bankruptcy, then that may be considered a preferential payment, and the trustee can have the car ordered to be returned to the bankruptcy estate (Assuming it hasn't already been sold). Once it's in the bankruptcy estate, the person filing bankruptcy can usually keep it thanks to the automobile equity exemption.
2. Most People Who File Chapter 7 Keep All of their Property
It's a commonly held belief that when you file for chapter 7 "liquidation" bankruptcy, you will lose some of your assets. What surprises many people is that in reality, about 90% of personal chapter 7 cases end up as "no asset" cases, because there is no non-exempt equity for the bankruptcy trustee to raise. See my post on the bankruptcy trustee or equity in bankruptcy for more on that subject.
3. Business Debtors Above the Means Test Can Still File Chapter 7
If your debt is 50% business debt or more, you do not have to pass the means test to qualify for chapter 7. This is huge, because it means you can be making a nice six figure salary, and still get all of your debt cancelled. Many people are weary of a chapter 13 (they shouldn't be, it's an extremely important protection for consumers) but can't qualify for chapter 7. If you run your own business that's not doing well, you can get into a chapter 7, liquidate the business and get off the hook for all your debts.
There is so much misinformation floating around about bankruptcy, that many people simply don't understand the power that this area of law provides them. It's unfortunate because so many people are unnecessarily struggling for years due to debt that the US Court could free them of.
