In most cases, yes. New York's vehicle exemption and bankruptcy protections let the majority of filers keep their vehicles. Here is how it works in both Chapter 7 and Chapter 13.
In most cases, yes. New York allows a vehicle exemption of $4,825. If your car equity (fair market value minus loan balance) is below $4,825, you can keep it in Chapter 7. In Chapter 13, you can keep your car and catch up on missed payments through your repayment plan.
New York's vehicle exemption under CPLR 5205(h) protects up to $4,825 of equity in one motor vehicle. Equity is your car's fair market value minus the loan balance.
Example: If your car is worth $12,000 and you owe $9,000, your equity is $3,000 - well within the $4,825 exemption. You keep the car.
If your equity exceeds $4,825: In Chapter 7, the trustee could potentially sell the vehicle and return the exempt amount to you. However, trustees rarely sell cars with marginal excess equity because of the costs involved.
New York allows you to choose between state and federal exemptions. You cannot mix and match.
| System | Vehicle Exemption | Wildcard Available? |
|---|---|---|
| New York State | $4,825 | $1,150 general wildcard |
| Federal (522(d)) | $4,450 | Up to $14,875 (unused homestead wildcard) |
If you are a renter (no homestead to protect), the federal exemptions may be better because the unused portion of the homestead exemption can be applied as a wildcard to your vehicle or other property.
In Chapter 7, you have three options for a financed vehicle:
Chapter 13 is often the better choice for vehicle protection because:
Cramdown example: You owe $18,000 on a car worth $11,000 (purchased 3 years ago). In Chapter 13, you pay only $11,000 as a secured claim. The remaining $7,000 is treated as unsecured debt and may be partially or fully discharged.
If your car was recently repossessed but not yet sold, filing bankruptcy may get it back. The automatic stay requires the lender to return the vehicle if it has not been sold at auction. Time is critical - act quickly.
In New York, creditors must provide notice before selling a repossessed vehicle. If you file bankruptcy before the sale, the stay applies and you may be able to recover the car through a Chapter 13 plan. See repossession and bankruptcy for more details.
In most cases, yes. New York's vehicle exemption protects up to $4,825 of equity. In Chapter 13, you can keep your car and catch up on missed payments through your plan. Learn more.
New York protects $4,825 of equity in one motor vehicle under state exemptions. If you choose federal exemptions, the vehicle exemption is $4,450 plus you may apply unused homestead wildcard. Full exemption details.
Reaffirmation is an agreement to continue paying a car loan after Chapter 7. You keep the car and the loan survives your discharge. Courts review these to make sure you can afford the payments.
If you purchased your car more than 910 days before filing, Chapter 13 lets you pay only the car's current value rather than the full loan balance. The rest becomes unsecured debt.
Use the free 1328(f) screener to check whether a prior discharge affects your eligibility.
Free Discharge ScreenerRelated New York Bankruptcy Resources
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