Will I lose my home or car if I file for chapter 7 bankruptcy?
In most cases you will not lose your home or car during your bankruptcy case as long as you can exempt the equity, if any exists, in your home or car. In New York, a person is currently allowed a fifty thousand dollar ($50,000.00) homestead exemption and a twenty-four hundred dollar ($2,400.00) motor vehicle exemption. If the property is exempt it may not be taken by the trustee.
However, bankruptcy does not automatically make a valid lien, mortgage or other security interest go away. Therefore, if you don’t make your payments on that debt, the creditor may be able to take and sell your home or car, during or after the bankruptcy case. Technically, a creditor can repossess your car even if your payments are current. The law requires you to redeem, surrender or reaffirm the vehicle (your bankruptcy attorney should advise you about this issue).
As always, The Long Island Bankruptcy Law Firm of VAUGHN & WEBER, PLLC is here to assist you. We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501. Contact us at (516) 858-2620 to arrange a consultation with a bankruptcy Attorney.
Remember: The law often changes, and each case is different. The above is meant to give you general information, and not to give you specific legal advice.