What to Do if You are Facing Car Repossession
If you are behind on your car payments, in many cases, your lender can repossess your vehicle without giving you any type of notice. However, bankruptcy can help stop the repossession and can even help you get your car back if it has already been repossessed.
Bankruptcy Automatic Stay
As soon as you file for bankruptcy, an automatic stay goes into effect. This means that your creditors must stop all attempts to collect their debts from you. They can not call you, move forward with a lawsuit, sell, repossess, or foreclose on any of your property. There are a few exceptions, but as a general rule, you are protected by the bankruptcy and your creditors are forced to seek permission from the court before they continue with any collection efforts.
Your Car Has Not Been Repossessed, but You are Behind on Your Payments
If you are behind on your payments, or in default, it is possible to wake up one morning and realize that your car is gone due to repossession if you wait too long to file for bankruptcy. If you believe that your lender may try to repossess your car soon and you are not able to catch up on your behind payments, filing for bankruptcy may be your best option to prevent repossession. A chapter 13 bankruptcy will let you catch up on the default payments and give you up to five years to pay off your loan. A chapter 7 bankruptcy will delay the repossession and give you a few months to catch up on your payments.
Can Filing for Bankruptcy Get My Car Back if it Has Already Been Repossessed?
Whether or not bankruptcy can help you get your car back depends on what type of bankruptcy you are planning to file. If your car has already been repossessed, you typically have less than two weeks before the lender is allowed to sell it to someone else. If the car gets sold to another party, you likely will not be able to get your car back. However, if it has not been sold, obtaining an automatic stay will stop the sale. You will have to act quickly and file before it is sold if you want to try to get your car back. So in which kind of bankruptcy are you most likely to get your car back?
- Chapter 7 Bankruptcy: This type of bankruptcy is usually not your best option because it does not allow you to catch up on your payments. You may be able to negotiate the return of your car with the lender and court, but you will likely have to bring your loan current and pay the costs of repossession in a very short amount of time. This is typically hard for most people to do.
- Chapter 13 Bankruptcy: This is your best chance to get your vehicle back because chapter 13 bankruptcy is designed to let you catch up on your back payments and pay off your vehicle through a repayment plan. When you file for a Chapter 13 bankruptcy, the lender will typically voluntarily return your vehicle, but you will have to pay any costs for the repossession.
Contact an Experienced Bankruptcy Attorney Today
If you are behind on your payments and fear your car may soon be repossessed, or your vehicle has already been repossessed, it is imperative that you contact an attorney as quickly as possible. The attorneys at Cornwell Law Firm will review your situation and help you determine what your best course of action will be. Contact us today to schedule a consultation.