If your vehicle has recently been repossessed, a Chapter 13 Bankruptcy might help you get your vehicle back! Chapter 13 Bankruptcy is a reorganization of your debts, which requires a monthly payment plan for up to 5 years. If you file bankruptcy soon enough after the repossession of your vehicle and the vehicle has not yet been resold or auctioned off, the automatic stay that goes into place as soon as a bankruptcy is filed will prevent the creditor who repossessed your vehicle from taking any further actions to collect the debt, which includes preventing them from being able to sell your vehicle.
If you are able to file a Chapter 13 before your vehicle is sold, your next step is to file a Chapter 13 Plan that shows that you are not only able to begin making your monthly car payments again, but that you will bring your car payments current through the Plan. If this is the case, your vehicle should be released back to you. You must also be able to show the bankruptcy court that the vehicle is a necessity and that you can afford your monthly payments by providing documentation of your income.
In a lot of instances once your vehicle’s lender receives notice of the bankruptcy as well as the Chapter 13 Plan (which shows that they will be adequately protected), the lender should willingly release your vehicle back to you. However, this is not always the case. If your lender refuses to return your vehicle to you, you will then need to ask the court for help. If you have proven that your vehicle is a necessity, that your Chapter 13 Plan gives the lender adequate protection, and that the vehicle is insured, the court should order your lender to return your vehicle to you.
Filing a Chapter 13 Bankruptcy may also help you to lower your monthly car payments. Depending on how much your vehicle is worth, the balance of your loan, how long you have owned your vehicle, and your interest rate, a Chapter 13 may allow you to reduce your interest rate and/or bring the balance of your loan down to the actual value of your vehicle.
If your vehicle was recently repossessed, you are behind on your monthly car payments, or are having a lot of difficulty making your car payments each month, filing a Chapter 13 Bankruptcy might be your answer. However, it is important to speak with an experienced bankruptcy attorney first who can help you review your financial situation as a whole and help you decide what is best for you. There are many other options that may be available to you, so contact the Law Office of David M. Goldman, PLLC today for a free initial consultation.