Keeping my Car in Bankruptcy
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Keeping My Car In Bankruptcy
Have you experienced a financial situation that has made it difficult or impossible to pay your car payments? Is your car lender threatening to repossess your vehicle? If you are behind on car payments, filing bankruptcy may be able to help you keep your car.
Filing Bankruptcy to Keep Your Vehicle
People file bankruptcy for many reasons. Some people need to file bankruptcy due to unemployment while others experienced a sudden illness that resulted in substantial medical bills and time away from work. Regardless of what caused your financial problems, your car lender is not sympathetic. Depending on the lender, you may be facing repossession after just one or two missed car payments. Therefore, it is important to contact our office to discuss your bankruptcy options as soon as you realize your financial situation makes paying your car payment impossible.
Chapter 13 and Repossession
By filing a Chapter 13 bankruptcy case, you can pay your past due car payments through your bankruptcy plan. The automatic stay provisions of the Bankruptcy Code prohibit the car lender from taking any action to collect the debt, including repossessing your car, once the bankruptcy case is filed. Your vehicle will be safe from repossession immediately. Filing a Chapter 13 case also takes care of wiping out your unsecured debt so that you can have a fresh start when you complete your bankruptcy plan.
Chapter 7 and Repossession
The bankruptcy automatic stay prevents the car lender from repossessing a vehicle when a debtor files a Chapter 7 case just as it does in a Chapter 13 case. However, a Chapter 7 case is not a reorganization; therefore, the automatic stay is only temporary. You must pay the past due amount and resume regular payments or surrender your vehicle in full satisfaction of the lien.
The benefit of filing a Chapter 7 case to stop a repossession is the filing delays the repossession giving you a little time to secure another vehicle and it prevents the car lender from trying to collect a deficiency after the vehicle is sold. A deficiency is the amount of money owed on the account after the vehicle is sold and the proceeds of the sale are applied to the account. Of course, a Chapter 7 case will also discharge most, if not all, of your unsecured debts while protecting your other assets from creditors.
Schedule a Free Consultation to Discuss Your Options to Keep Your Vehicle
If you are facing a repossession, contact Weston Legal, PLLC at 1-800-220-4318 to discuss your bankruptcy options. You may be able to keep your car by filing a bankruptcy case; however, our attorneys must review your specific financial situation in order to determine your options.