New York City Bankruptcy advice and solutions

By:  Daniel Gershburg, Esq.

A recent New York Bankruptcy client of mine had the following situation.  He owned a car, outright, which was worth approximately $15,000.00 at the time of him wanting to file for Bankruptcy.  He was told by many of his peers that, for whatever reason, the car could be exempted.  It could not.  Here is the way the scenario usually plays out.  You only have a few thousand dollars in exemptions in New York.  Anything that falls over the exemption is fair game to the trustee and the trustee is not only allowed, but is ENTITLED to take your vehicle once it is determined that your vehicle falls above the exemption in New York.  

How do you keep your vehicle?  You pay for it or you lose it.  Thats right, you would make the trustee, who receives a commission on property that is sold, an offer to keep your vehicle.  We attempt to negotiate with the trustee and minimize the amount you pay, but you nevertheless do have to pay the trustee money just to keep the vehicle that you pay for.  The other alternative, if you can even call it that, is that the vehicle is taken by the trustee, sold, and the proceeds are distributed to your creditors.  

Another possible solution is filing a Bankruptcy under Chapter 13 as opposed to Chapter 7.  There are some advantages but those will be covered in a separate blog.  

The moral?  Think about the actual value of your vehicle before you decide to file for Bankruptcy.  Determine the value by looking at the present day Kelly Blue Book value of the vehicle.  Don’t convince yourself that the car is worth less than it is simply because it has a few dents and bumps.  Keep that in mind so that you can keep your car.  


Daniel Gershburg Esq., is a Bankruptcy & Real Estate attorney serving a diverse clients in Brooklyn, Queens, Manhattan, Staten Island, Long Island and Westchester. Mr. Gershburg has given lectures and presentations to both attorneys and the community at large surrounding Bankruptcy and financial advocacy in the New York City area. He is also a member of the National Association of Consumer Advocates, an organization dedicated to promoting economic justice to consumers around America.  Currently he is working on his first book giving practical advice about repairing troubled credit and improving credit post Bankruptcy