Legal Question in Bankruptcy in New Jersey

Re: Information on Chapter 7

If there is unencumbered non-exempt equity in the vehicle, and you can't redeem it from the trustee, then the trustee may liquidate that equity into cash for your creditors. And, if you are not current on the loan and do not remain current on the loan, the lender may vacate the stay and repossess the vehicle. On the other hand, if your auto loan account is current, and you remain current by making the required monthly installments, and the amount of the auto loan balance that is secured by the vehicle lien plus the amount of the statutory exemptions you can claim against the automobile in the aggregate exceed the vehicle's value (thus leaving no equity for your creditors), then you should be able to retain the vehicle without having to reaffirm the debt. Alternatively, if the vehicle lien amount plus the exemptions you can claim against the vehicle in the aggregate exceed the vehicle's value (thus leaving no equity available for creditors), you can retain the vehicle by reaffirming the auto loan indebtedness, but you must stay current on the loan since reaffirmation won't allow you to discharge the auto loan debt in your chapter 7 case if later you default. Even if there is equity in the vehicle after applying the aggregate of the vehicle lien amount plus the exemptions you claim against the vehicle, you might still be able to retain the vehicle vis a vis any claim by the trustee if you are able to redeem from the trustee the unencumbered non-exempt equity in the vehicle.