We understand that individuals are forced to deal with situations that are less than ideal and it is our goal to help find solutions for anyone struggling financially. A repossession can be a massive burden on anyone who relies on personal transportation, and we wanted to share some insight on how Chapter 7 and Chapter 13 Bankruptcy may serve as a solution before, during, or after a repossession.
In most cases, a repossession happens when a bank or leasing company takes a vehicle away from the borrower. The borrower, who agrees to specific terms when purchasing the vehicle, may be at risk of having their car repossessed if certain terms of the agreement are not met. If you take out a loan to purchase your car, then the lender would have a vested interest in your vehicle. If you don’t make payments on your car, the lender can repossess it. In most cases, bankruptcy does not change the security interest. The trustee in this situation is only concerned with the amount of equity you have built up in the car. The equity is the value of your vehicle less than the balance owed. If your car gets repossessed, and you intend to file for Chapter 7 or Chapter 13 bankruptcy, you should contact an experienced bankruptcy attorney immediately.
How to keep your car during chapter 13?
Under Chapter 13, you typically have the opportunity to agree to a repayment plan with your creditors that suits your current financial situation. All repossession inquiries from a lender usually stop after an individual files for Chapter 13 bankruptcy. Under the Bankruptcy Code, the automatic stay will prevent a lender from repossessing your vehicle and prevent them from taking other actions that are common when terms of a purchase agreement are not met. Give us a call to speak with one of our bankruptcy attorneys about your financial situation to see if Chapter 13 is right for you.
How to keep your car during chapter 7?
If you are going to continue making your regular car payments, the lender may require you to reaffirm your car loan in order to keep it. A chapter 7 discharge eliminates your personal liability on the loan of the car. This means that if you don’t make your payments, the lender can still repossess your vehicle and sell it but cannot sue you for any deficiency if the proceeds of the sale were not enough to pay off the entire loan. Give us a call to speak with one of our bankruptcy attorneys about your financial situation to see if Chapter 7 bankruptcy is right for you.
If you find yourself getting into trouble with your credit card debt, contact Castle Law Office to help you with your Chapter 7 and Chapter 13 Bankruptcy options. Call us today at 816-842-6200 to speak with an attorney. Or, you can email us and schedule your free consultation.