If you file for Bankruptcy in New York there are several options for you to keep your car. Much of this depends on whether you file for a Chapter 7 or Chapter 13 Bankruptcy. If you file for a Chapter 7 (Liquidation) and you have less than $4,000 in equity (equity= value of the car minus what is owed on the car is equity) then there is no problem and you can keep your car. If a married couple files jointly then there is an $8,000 exemption (amount of equity doubles). Similarly, if the car is equipped for a handicapped person then up to $10,000 in equity can be exempted. There is also the option of redeeming the car or if there is only a small amount of equity in the car the trustee may abandon it (meaning you get to keep the car) or you can purchase it from him at a discount.
In a chapter 13 Bankruptcy you get to keep the car regardless of the value.
If you are considering filing for bankruptcy in New York and would like a free, no-obligation consultation contact my office at 212-244-2882.