Typically, in a large majority of cases, you automobile is protected when filing for either Chapter 7 or Chapter 13 bankruptcy. However, if you file bankruptcy in New Jersey, the outcome of your car could depend on several factors, including the type of bankruptcy you file, the value of your car, and any exemptions you claim.
Chapter 7 Bankruptcy: If you file Chapter 7 bankruptcy, your car may be sold to pay your creditors if its value is above the state exemptions. In New Jersey, you may be able to claim a motor vehicle exemption of up to $3,000. If the value of your car is less than the exemption, you may be able to keep it. You may choose the federal exemptions in New Jersey which allow you to protect $4,450.00 of equity per person. Further, the Federal exemptions also have a Wildcard exemption of up to over $15,000.00 which could be partnered with the automobile exemption. As such, unless you have an automobile with a significant amount of equity, your vehicle will be safe.
Chapter 13 Bankruptcy: If you file Chapter 13 bankruptcy, you may be able to keep your car as long as you continue making payments on your debt through your payment plan. Your payments will be based on the value of the car and the amount of your debts.
Ultimately, the outcome of your car in a bankruptcy case will depend on your specific circumstances, and you may want to consult with a bankruptcy attorney for guidance.
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