In New York debtors are allowed to keep 1 car in a chapter 7 Bankruptcy and an unlimited number of cars in a chapter 13 Bankruptcy. Here is how it works. You are allowed to keep up to $4,000 in equity in a vehicle ($10,000 if it is a handicapped vehicle). So if your car is worth $15,000 and you do not owe any money on the car then you have $15,000 equity. In that case the trustee would sell the car and give you the first $4,000 to keep. The trustee may also abandon the car, which means the trustee does not want to waste time selling it and you get to keep it. So there is still another option. 722 Redemption is where a 3rd party buys the amount over the equity (here $12,000) from the trustee and you pay the 3rd party back over time.
Now let’s say you have a leased car. You get to keep it as long as you remain current on your lease.
In a New york Bankruptcy filing it is very important to have an experienced lawyer handle the case if there is property involved. If everything is not done correctly you can loose your car or house. If you contact my office and mention this blog I will give you a free consultation. Additionally, if you sign a retainer with my office I will pay for your credit counseling courses and your 3-bureau credit report. My office takes payment plans and only charges $500 for the initial retainer. This amount does not include court costs and more money may be required further into the case depending on it’s complexity. You can reach my office 24 hours a day at 212-244-2882.