QUESTION
Declaring bankruptcy in New Jersey and keeping the car that is being financed.
Asked on Sep 22nd, 2011 on Bankruptcy - New Jersey
More details to this question:
I have someone who is living on Social Security with no job prospects to suppliment their income. They have $11,350 in credit card debt & $16,200 left on a car loan which is financed in New Jersey. If they declare bankruptcy in New Jersey, will they still have to pay some money towards the creditors and will they lose their car?
1 ANSWER
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The answer to this question will depend on a number of factors. However, the short answer is that it is very likely that they will be able to file a Chapter 7 bankruptcy and discharge their credit card debt. Whether they lose their car or not depends solely on if they are able to keep making their payments. Generally speaking, bankruptcy does not change a debtor's relationship with their secured creditors (car loan, mortgage company). If they do not make their payments, then the car company can move to vacate the automatic stay to repossess the vehicle. However, a discharge in bankruptcy will discharge any of the Debtor's personal liability on any deficiency created by the repo, if the car is subsequently liquidated for less than the bank is owed.
Answered on Nov 07th, 2011 at 4:09 PM