In Long Island, most people need a car. The difference between a vehicle and no vehicle can mean the difference between a quick 15-minute commute and an hour or more spent hopping on various modes of public transportation.
In certain areas of New York, the prospect of losing a vehicle can be immensely stressful, not to mention extremely inconvenient, both on a personal and professional level. Fortunately, despite misconceptions, bankruptcy does not mean that you have to lose your vehicle. When you file for bankruptcy, if you want to continue to make payments, you can keep your vehicle.
While there are several options for keeping your vehicle, it ultimately depends on:
- Whether or not you are current on payments
- The type of bankruptcy filing
- The creditor to whom you owe
Nassau County Auto Repossession and Redemption Lawyer
There are three vehicle options in bankruptcy, two of which allow you to keep the vehicle:
Surrender — If you pursue a surrender, you give the asset to your creditor and once the bankruptcy discharges, you won't be responsible for any remaining amount due on the loan after auction.
Reaffirmation — In this case, you reaffirm debt and continue to make payments. The added benefit here is that if you continue to pay, it can help with credit.
Redemption — If you pursue a redemption, you pay a lump-sum payment equal to the market value of the vehicle. Many companies will offer bankruptcy clients loans for the market value of a vehicle. If, for instance, you owe $15,000 on a vehicle, but its worth does not exceed $7,000, you can pay the $7,000 and buy the vehicle without having to pay the remainder of the debt owed.
In the case of Chapter 7 filings, New York state exemptions allow debtors to keep one motor vehicle titled in their name that is valued at $4,000 (in equity) or less. This number jumps to $10,000 for disabled debtors. A debtor filing Chapter 7 who claims the federal exemptions in his or her filing can potentially keep a motor vehicle that has up to $15,425 in equity. These calculations can be complex and I encourage you to reach out as soon as possible to discuss these matters if you are considering bankruptcy.
To discuss how to stop car repossession in a free initial consultation with bankruptcy attorney Scott R. Schneider, call 516-433-1555 or e-mail him here.
I am a federally designated debt relief agency. I help people file for bankruptcy relief under the Bankruptcy Code.
