Many people looking for debt relief are afraid they will lose all their property by declaring bankruptcy. However, that is not the case. In fact, state exemptions allow you to keep a considerable amount of your property. By consulting with an experienced lawyer, you can learn more about the different bankruptcy chapters and whether bankruptcy is right for your situation.
Do you own your car?
If you own your car, or if you are current on your auto loan payments, you may be able to keep your car. However, if you are behind on your loan payments, your car must be repossessed to satisfy your debt.
Determine vehicle value
If you own your car, whether you will be able to keep it after bankruptcy depends on its value. When filing for bankruptcy, you will must list the current value of your car, truck, or motorcycle. To uncover the fair market value of your vehicle (the value based on age, make, and condition), you should consult with an auto expert, or visit Kelley Blue Book. Remember to also consider any equity you put into the car.
Chapter 7 exemptions
If you’re filing for Chapter 7 bankruptcy, your nonexempt property may be liquidated to pay off your debt. However, certain property is exempt from seizure. According to New York bankruptcy law Debtor & Creditor 282 , there is a motor vehicle exemption up to $4,425 ($11,025 if equipped for disabled person). Other exemptions include:
- Personal property
- Public benefits
- Trade tools
- Alimony and child support
Depending on your situation, your bankruptcy trustee may decide to “abandon” your vehicle. This occurs when it’s determined that there won’t be money left for creditors after the vehicle’s sale. They may also let you buy your vehicle back at a negotiated rate.
At Thomas M. Denaro, Esq., we work tirelessly to protect your rights and assets. Our attorneys think outside the box and explore every option to help you live free of debt.