So lets attack this : What happens to my car if I file for a Chapter 7 Bankruptcy in New York?

Well, your favorite Bay Ride Bankruptcy Lawyer says a few things can happen.

• If you lease your vehicle in New York and you file for Bankruptcy, nothing happens.  You either get to keep the vehicle and re-affirm it (unless its a new Mercedez Benz, which can indicate bad faith), or you can give it back and you’re no long responsible for the vehicle and its deficiency.
• If you own a vehicle and file a Chapter 7 in Brooklyn or Manhattan:  This depends on whether there is significant equity in your vehicle.  If there is no equity in your vehicle, and typically there is not since you’ve likely made a small down payment on the vehicle, your vehicle will depreciate quicker than you’re paying off your note on your vehicle.  In English, your car is worth less than whats owed on it.  Great, keep the car if you want or give it back.  Choice is yours.
• If you own a vehicle in Brooklyn or Manhattan (you’re crazy-the paring garage’s will take your first born its so expensive) and you have significant equity in the vehicle before you file for a Chapter 7 Bankruptcy in Brooklyn or Manhattan, you will have a choice.  You need to know, from your trusty Bay Ridge Bankruptcy Lawyer, that you can exempt up to $2400 of equity in the vehicle, or $4800 if you file jointly (romantic), which will be yours if and when your car is sold.  That means if your car in Bay Ridge, Park Slope, or Williamsburg is worth $10,000, technically the Bankruptcy Trustee in Brooklyn can only get their hands on $7600 of that equity if they sold the vehicle.  The remaining $2400 is yours.  But be forewarned that if you own your car outright OR have significant equity, the Trustee will likely sell your car and pay off creditors with the money (and give you $2400 or $4800.)
• You can also negotiate to purchase your car in a Brooklyn Bankruptcy…from yourself.  Lets say that car is worth $10,000, and you have your $2400 exemption, the Trustee is still going to have to pay expenses to sell your car (auction price, fees, shiny salesman guy, etc).  Therefore you make the Trustee an offer.  Your Brooklyn Bankruptcy Lawyer says to the Trustee:  ”Trustee (insert name), my clients are willing to give you $6000 for the vehicle in two payments of $3000 each.  Love (or sincerely), Brooklyn Bankruptcy Lawyer Daniel Gershburg.”  The trustee may accept this, or they may simply say I don’t like that offer make me another one.  Either way, if you have some disposable cash, you can and should be able to buy your car back.  On the other hand, for giving up a car worth several thousand, you’d also be able to get out of debt sometimes over $100,000.00. In any case, the choice is yours.

So now you know all (most) there is to know about whether your should file for Chapter 7 Bankruptcy in New York City if you own a car.  There are many more issues surrounding this topic, so please talk to a Bankruptcy Attorney in Bay Ridge, Park Slope, Williamsburg, Sheepshead Bay, or anywhere you may live in Brooklyn, before filing.

But we all know this. We all know that there is a mortgage crisis and that many people are close, if not in, foreclosure already. What is a first time home buyer to do? Here are a few tips that I tell every one of my Real Estate clients in my practice:

1. Buy a home you can AFFORD! This tidbit may seem quite obvious to some, but some of my past clients have attempted to purchase homes they simply could not afford. While ultimately this is your decision as a client, you should nevertheless look at your financial situation before going into contract on a property. Ideally, what you want first and foremost is a strong credit rating,which will enable you to obtain a mortgage at the best interest rates,thereby saving you thousands upon thousands of dollars during the life of the loan.
2. Next, look at your monthly expenses. If your mortgage is taking up more than 40% of your net pay, then it is very likely that it is too expensive to purchase.Make sure you realize that the current Real Estate market is not the same market as it was three or fours years ago. I don’t care that your neighbor was able to flip his property in 2004 and make 60% back overnight. This is not the same ballgame. You should realistically expect to hold on to the property for at least 7 years (the national average). Take this into account if your simply thinking of buying a property to fix it up and sell it in a year or two.
3. Do you have an emergency fund? Typically you want three to six months of living expenses put away when you purchase this house, so that if you find yourself out of work a year from now, or if some other emergency occurs, you will still be able to pay the mortgage and wont risk hurting your credit or going into foreclosure.
4. Find a lender you TRUST. Let me say this again…FIND A LENDER YOU TRUST. In the past few years many people have “become” mortgage brokers. Do not simply hire the first name you’re given. The last thing you want is to show up at the closing and have to pay thousands of dollars out of your pocket for surprise fees that you knew nothing about, and which were not explained to you by your broker. Ask for references from the broker himself. If he or she is an established broker, he should have no problem supplying them. Another option that I frequently advise my clients to look at are online banks such as ING Direct, E-Loan, or E-Trade. These institutions do not typically have brick and mortar establishments. Without physical branches, there are less expenses, which usually means they are able to pass on those savings to the consumer, in the form of better interest rates and a reduction in closing costs. Finally, I recommend perusing www.bankrate.com before you decide on a lender. This site will not only give you a list of national mortgage lenders, but it will explain what closing costs, if any, the lender charges, as well as the interest rate charged for a particular type of loan.
5. Finally, consult with your attorney about the above BEFORE you sign that contract of sale. Unfortunately, some “Real Estate” attorneys in New York will simply make a few changes to a Contract of Sale and show up to a closing to collect their fee. You don’t want that, nor do you deserve it. You want an attorney who understands that this is a process with several steps along the way. This is your livelihood and your happiness. Make sure you find an attorney who understands that and will guide you along the way. In my practice,I make it a rule to sit down with a client for at least one hour before we even discuss the Contract of Sale. We discuss their finances, the time frame of living in the property, and what type of mortgage they are looking for and why. Its my job, as an attorney,to educate that client and make sure there are never surprises along the way. Buying a home, after all, still is the American Dream and should be an incredibly rewarding and satisfying experience.