Bankruptcy Can Stop Car Repossession
Anyone who has suffered car repossession knows that is can happen quickly. Even if a debtor is only a few weeks behind on their car payment, repossession can take place fast and without warning. Most people who suffer car repossession have been having financial trouble for some time; but unfortunately they chose to not contact the lender or a bankruptcy attorney to find a solution. You do not need to lose your car to repossession.
Here’s what you need to know:
Some Lenders are Willing to Temporarily Lower or Defer Your Car Payment
But they won’t offer such a deal if you don’t call them. If you feel that you are going to miss a payment, don’t delay, call you lender now and see if they can reduce or defer your payment temporarily.
When a debtor files bankruptcy the “automatic stay” will stop all collections activities against you. But once discharged out of Chapter 7 bankruptcy or in the repayment phase of Chapter 13 bankruptcy you will still need to make payments on your car if you want to keep it. Alternatively, you can do a voluntary repossession during bankruptcy. The lender will auction the vehicle and the balance on your loan may be discharged in Chapter 7 bankruptcy. In Chapter 13 bankruptcy you can repay your car loan (plus any late payments) through the repayment plan.
If a Lender Repossesses Your Car Outside of Bankruptcy
If a lender repossesses your car outside of bankruptcy and auctions it off for less than what you owe, they could come after you for the balance. Even at this point you can file bankruptcy and discharge the deficiency balance in a Chapter 7 bankruptcy.
Have Questions About Car Repossession and Bankruptcy?