Before we delve into the specifics of keeping your car during bankruptcy, it’s essential to understand the bankruptcy journey itself. Bankruptcy is a legal process designed to provide individuals and businesses with a fresh financial start. It involves a court-supervised restructuring of your debts, allowing you to either eliminate or repay them over time. In New Jersey, there are primarily two types of bankruptcy for individuals: Chapter 7 and Chapter 13. Each comes with its rules regarding the retention of assets like your car. Please continue reading and reach out to a seasoned Bergen County bankruptcy lawyer from the Law Office of Boyd & Squitieri to learn more about whether you can keep your car with bankruptcy and how our legal team can effectively guide you through the process. Here are some of the questions you may have:
Can I keep my car when filing for Chapter 7 bankruptcy?
If you’re considering Chapter 7 bankruptcy in the Garden State, you’re likely aiming for a clean slate. This form of bankruptcy typically involves selling non-exempt assets to pay off your debts. However, New Jersey law does allow you to keep certain property through exemptions.
In fact, New Jersey offers a motor vehicle exemption that allows you to keep your car, provided it falls within the exemption limits. These exemption limits change from year to year, so it’s important you speak with a competent attorney who is abreast of the law and who can accurately assess your situation.
Can I keep my motor vehicle if I file for Chapter 13?
If Chapter 7 doesn’t align with your financial situation or goals, Chapter 13 bankruptcy might be the best route to take. Under Chapter 13, you create a repayment plan to gradually pay off your debts over three to five years. This plan can also include your car payments.
One advantage of Chapter 13 is that it allows you to catch up on missed car payments while keeping your car. If you’re facing the threat of repossession, Chapter 13 can be a lifeline. Your car loan is incorporated into your repayment plan, making it more manageable and helping you retain your vehicle.
If you have any further questions about bankruptcy, including which type may be best for you, what assets you’ll likely be able to keep, and more, please don’t hesitate to contact the Law Office of Boyd & Squitieri today. We have decades of experience guiding clients through the bankruptcy process and onto brighter futures, and we are here to put that experience to work for you in your case as well.
