Stop Car Repossession with Chapter 13 Bankruptcy
If your bankruptcy lawyer files for Chapter 13 bankruptcy, you usually can permanently keep your car. Chapter 13 bankruptcy allows you to set up a “repayment plan” to get caught up on any missed car notes over time – and avoid repossession.
When your bankruptcy lawyer files for Chapter 13 the court puts something called an “automatic stay” into effect. This “stay” stops all creditors – including your car loan company – from pursuing any further collection actions against you. As long as you stay up to date on your re-payment plan payments, no one can repossess your car.
Also, if you are upside down on your car note (you owe more than the car is worth), the bankruptcy judge might even lower the amount remaining on your auto loan – and reduce what you still owe down to just the actual replacement value of your car.
Delay Car Repossession with Chapter 7 Bankruptcy
Chapter 7 bankruptcy does not permanently stop car repossession – but it can temporarily delay a lender from repossessing your automobile. This can give you valuable “extra time” to try and get caught up on your car payments, or at least find other transportation. Plus, filing Chapter 7 bankruptcy CAN get rid of other debts (such as credit card & medical bills or judgments) – which often frees up enough money for you to start making your car payments again.