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Repossession FAQs

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If you happen to fall on hard times or find that you are unable to make regular payments on your loan, a repossession can occur — moreover, the sudden and unexpected seizing of one’s vehicle or home. 

If you find yourself in this difficult situation, you may have dozens of questions about the process. We’re here to help answer those.

In today’s post, Groce & DeArmon will cover the most commonly asked questions regarding repossession.  

What is repossession?

This occurs when someone is delinquent on paying a loan for a property. Repossession of a house is called foreclosure. Whereas, the most common form of repossession comes about due to missed car payments. 

Should I pay off a repossession?

Yes. Paying it off immediately reduces the debt owed and helps your credit score.

If my car is repossessed, do I have to pay off the entire loan? 

In most states, including Missouri, this is the case. But it can vary state by state.

Can you recover from a repo? 

Inquire into why your car was repossessed. Find out ways you can get it back. If it’s sold, see if you still owe money. Work on repairing and improving your credit score.

Does a repossession affect a cosigner?

Yes. The credit score for the primary borrower and cosigner is affected. A repossession can stay on the cosigner’s credit report for up to seven years.

What is voluntary repossession? 

This is when a borrower directly informs the lender that they can no longer make payments and would like to give the car back. The creditor resells the vehicle and you receive a statement explaining the details of the sale. You pay the deficiency amount, which is the difference between what the car sold for and what your loan principal. 

What is a deficiency balance? 

When your vehicle is repossessed, the deficiency balance is the amount of the original loan that is unpaid after the lender has taken possession of the property and sold it to recover the loan balance. 

How do I deal with deficiency? 

If you feel what you’re paying is unfair, you can negotiate a payment plan with your lender, settle for a deficiency payment less than the amount you owe or file for bankruptcy to wipe the slate clean.

How long does voluntary repossession stay on a credit report? 

It will stay on a credit report for seven years. It negatively affects auto-related credit scores that determine the interest rate on your next car loan. 

What happens after my car is repossessed? 

The car is taken and sold at auction. If it sells for less than what you owe, you can be sued for the difference.

Related Post: How to Reclaim Your Car After Repossession.

How do I get my personal items back from a repo? 

The lien holder may have a legal right to your car, but not to the items inside your car. Most repo companies notify you of where you can pick up your items. If not, Missouri law requires the lender to give back your items. Contact the lender with a list of what items you need. Aftermarket vehicle add-ons aren’t your property but part of the vehicle. 

How can I stop repossession? 

A Chapter 7 (liquidating assets to pay creditors) and Chapter 13 (restructuring debt) bankruptcy will stop a repossession, since the point of a repo is for the seller to get his or her payment You can also pay the loan amount in full, or you can buy the car back at its fair market value. 

How does Chapter 13 bankruptcy stop repossession?

Filing for Chapter 13 bankruptcy allows you to keep your car while paying off the loan at a lower interest rate. 

Does Chapter 7 bankruptcy get rid of repossession?

A Chapter 7 bankruptcy case can stop the creditor from selling the car at auction, but this only stops the repo temporarily.

What auto repossession notices are there in Missouri? 

  • Notice of Default and Right to Cure
  • Notice of Our Plan to Sell Property
  • Notice of Sale and Possible Deficiency

Can repossession be removed from my credit report? 

If the lender cannot prove that your debt is accurate, fair or substantiated, the credit bureaus can remove the repo from your credit report. The time frame to negotiate this request can be limited and vary state by state.

Can I buy a house with a repo on my credit? 

You can still apply for a home loan after having your property repossessed. The sooner you apply for one after a repo, the less likely you are to have your FHA loan approved. 

Do I still owe money after repossession? 

After a car or home has been repossessed, you may still owe the lender a sum of money called “deficiency.” 

How does a repossession work, exactly? 

Once the credit account is designated as delinquent by the bank, due to a missed loan payment, the lender can file for a repossession of the property. Banks have custody of the property via the repo agency, who hires third-party contractors to clean and sanitize the vehicle or home. These excess costs are pushed off on the debtor to pay.

What is a repossession agent? 

Otherwise known as a “repo man” or a recovery agent, this person collects property from someone who defaulted on a loan made on the property.

How can a repo agent or team be stopped? 

A repo company cannot trespass on private property to retrieve a car. If a repo agent “breaks the peace” or breaks the law during a repossession, you can call the police and stop the repossession from occurring. 

Can I hide my car from the repo man? 

Yes. So long as you are not trying to defraud the bank, you can avoid or hide your property from the repo agent.

Know your rights when it comes to repossession. 

A repo company cannot trespass on private property to retrieve a car. Your property should not be damaged in the process. If it is, you may sue the repossession company for damages.

Hire Groce & DeArmon for repossession and bankruptcy help

Get trusted, experienced help from our seasoned bankruptcy lawyers. We can be there for you during the process of repossession and help you get the right legal aid and help to come out on top. Visit us online for a free consultation, or call us at 417-862-3706 to learn more.

Will Chapter 7 Bankruptcy Stop Vehicle Repossession?

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Hand holding a car

If you are unable to make payments on your vehicle and you have decided that bankruptcy is the right option for you, the next step is to decide whether you should file for Chapter 7 or Chapter 13 bankruptcy. While Chapter 7 bankruptcy will not permanently stop your car from being repossessed, it may buy you time to get your defaulted loan back in check. Read on to learn more about how Chapter 7 bankruptcy may be able to help!

Chapter 7 Bankruptcy and Repossession

It’s important to note that in Chapter 7 bankruptcy, there are still ways for lenders to repossess your vehicle. Here are two ways that this can happen.

The Automatic Stay

When you file for bankruptcy, the automatic stay goes into effect. This prohibits creditors from collecting or repossessing your vehicle without court approval. While this can give you time to get your finances in order, the Chapter 7 bankruptcy automatic stay only lasts a few months. This means that once your case is closed the lender may repossess your vehicle. 

Court Approval

If a lender wants to repossess your car sooner, they may be able to do so by asking for court approval regardless of the automatic stay. Most Chapter 7 judges will approve this motion by the lender unless you can prove that you are attempting to catch up on missed payments. 

Related Post: Your Bankruptcy Options Before and After Repossession

How You Can Stop Repossession

While there are ways a lender can repossess your vehicle despite the fact that you filed for Chapter 7 bankruptcy, there are also things you can do to help stop repossession. 

Negotiate

The temporary automatic stay that goes into effect during Chapter 7 bankruptcy allows you enough time to negotiate with your lender. In some cases, you may be able to negotiate terms with them to keep the car and ultimately avoid repossession. 

Bring Your Loan Up to Date

If you can find a way to bring the defaulted amount on your loan up to date during the temporary stay, do it! After this, the lender will not have any more reason to repossess your vehicle. Just be sure to continue making payments!

Wipe Out the Lien

Under Chapter 7, you may also redeem the car if you buy it back at it’s fair market value. This will wipe out the lender’s lien. This can help you save a lot of money if the market value of your car is significantly less than the loan. 

Related Post: The Effects of Bankruptcy on Repossession

Chapter 7 Bankruptcy at Groce & DeArmon

If you think that Chapter 7 bankruptcy can benefit you in the event of a repossession, call Groce & DeArmon today! Our bankruptcy attorney Shari DeArmon has over 30 years of experience with Chapter 7 bankruptcy cases in the Springfield area. Get started by scheduling a free consultation or call us at 417-862-3706 for more information. 

Your Bankruptcy Options Before and After Repossession

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Repossessed car being towed

If you have been unable to make regular payments on a car loan, your lender may reclaim possession of your vehicle. Repossession usually results in the lender selling your vehicle to pay off the remainder of the loan, but there are steps you can take to stop the repossession or even reclaim your vehicle if it has been taken away through bankruptcy. 

Filing for Bankruptcy Before Repossession

If you are behind on your car payments, it is very possible that your vehicle may be repossessed at any time. If you have any reason to believe your lender may repossess your vehicle, or you know you may not be able to make future payments in addition to those that you already missed, one of your options to avoid repossession is to file for bankruptcy. Bankruptcy will give you time to catch up on your payments. Whether you choose to file for Chapter 7 or Chapter 13 bankruptcy will determine the amount of time you have to catch up. 

When you file for bankruptcy, an automatic stay goes into effect. This will not eliminate the possibility of future repossessions, but it will buy you some time to figure out your financial situation before your vehicle is repossessed. 

Related Post: The Effects of Bankruptcy on Repossession

Filing for Bankruptcy After Repossession

If your car has already been repossessed, you may be able to get your car back, depending on what type of bankruptcy you file. After your car has been repossessed, you typically have two weeks before the lender will sell it to help repay the money lost on the loan. In order to get your car back in those two weeks, you will have to file for bankruptcy before it is sold. 

Chapter 13 Bankruptcy

If you decide to file for bankruptcy to get your car back after repossession, Chapter 13 is usually your best option. Chapter 13 bankruptcy will give you time to catch up on your vehicle payments with a repayment plan, and lenders will typically return your vehicle to you after you file. 

Chapter 7 Bankruptcy

You may be able to get your car back through Chapter 7 bankruptcy, but in this case, you will not be allowed much time to catch up on payments before it is sold. In some cases, you may be able to negotiate the return of the vehicle, but this usually involves making the loan current which may be difficult in such a short amount of time. 

Related Post: Will Chapter 7 Bankruptcy Stop Vehicle Repossession?

Filing for Bankruptcy With Groce & DeArmon

Whether you want to avoid vehicle repossession due to too many missed payments, or your vehicle has already been repossessed, Groce & DeArmon can help. We can help you decide which type of bankruptcy is best for you, and we will be there for you during the process. Our bankruptcy lawyer Skari DeArmon has provided legal aid in the Springfield area for nearly 30 years and specializes in Chapter 7 and Chapter 13 cases. Visit us online for a free consultation or call us at 417-862-3706 today to learn more. 

Bankruptcy and Repossession: Does Filing Bankruptcy Remove Repossession?

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Repossession of a vehicle is a tiring and often confusing process, and making the decision to file for bankruptcy only adds to the stress. It’s important to understand the reason your vehicle is in repossession before you decide whether bankruptcy is the best solution.

Filing for bankruptcy before your car is taken may give you certain rights as a property owner to prevent further action. There are also ways to get your car back after a repossession. In today’s blog, the bankruptcy attorneys at Groce & DeArmon explain the different ways you can avoid or delay a repossession of your vehicle.

What Is Repossession?

Lenders of a secured loan may repossess property obtained through the loan if you have not been able to make payments on that loan. Repossession usually occurs on property such as vehicles or real estate, and will most often occur with notice and without force. Without further action, repossession usually results in the lender selling the property to pay off the remaining balance of the loan.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy, also known as the wage earner’s plan, allows individuals with consistent income to create a plan to repay all or part of their debt. Repayment plans are typically made in installments over three to five years. This form of bankruptcy is available for all individuals with unsecured debt less than $394,725 and secured debt less than $1,184,200.

What It Means for Repossession

Chapter 13 bankruptcy prohibits the lender from repossessing your vehicle or property until the payment plan is approved by the judge. However, this may not protect you if you have filed for Chapter 13 bankruptcy in the past 30 days or you reject a personal property lease. In these cases, the creditor can ask the court to lift the automatic stay. One benefit of this type of bankruptcy is that it may reduce the balance on your loan to match the value of the property.

If you feel that Chapter 13 bankruptcy is right for you or you have questions about filing, call the bankruptcy attorneys at Groce & DeArmon.

Related Post: How To File For Chapter 13 Bankruptcy

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is the most common form of bankruptcy available to qualifying individuals, couples, or companies through the use of an overseeing Trustee. Chapter 7 bankruptcy is normally dismissed several months after the case is filed and may result in the selling of personal property and unsecured debts being wiped out.

What It Means for Repossession

Chapter 7 bankruptcy allows for an automatic stay on your property which keeps the lender from repossessing your vehicle unless they file a motion to lift the stay. In the event that the court allows the lender to proceed with repossession, Chapter 7 allows you to set forth one of the following options:

  • Redeem: Buy the vehicle back from the lender in one lump sum.
  • Reaffirm Debt: Agree to new terms of payment with the lender.

If you decide that Chapter 7 bankruptcy is right for you or you have questions about filing, call the bankruptcy attorneys at Groce & DeArmon for help.

Alternatives to Bankruptcy

Filing for bankruptcy is not always the best option for dealing with repossession. Here are a few things to consider before you make the decision.

  • Reinstating your vehicle loan by making all past due payments in one lump sum may help you avoid filing for bankruptcy. Contact your lender right away and start by requesting a reinstatement quote. The reinstatement amount is typically viable for a short amount of time and is no longer feasible if the car is sold.
  • Redeeming your vehicle is the act of paying off the remaining outstanding balance of your loan, including the fees and charges. Redemption is typically viable for a short period of time and is no longer feasible if the car is sold.

How to Get Bankruptcy and Repossession Help

It’s always a good idea to contact an experienced bankruptcy attorney at Groce & DeArmon to ensure you are making the right decision about filing for bankruptcy in the event of repossession. Schedule your free consultation with us today.  

Related Post: When To Seek Legal Aid For Potential Bankruptcy

Bankruptcy and Repossession: What is at Risk of Repossession?

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Car Getting Repossessed

There are few things in life more harrowing than waking bright and early on a weekday morning, pouring a cup of coffee from a fresh pot, and walking out the door to find your car’s front axles up on a tow truck. There is nothing you can do but watch as your ride to work, your access to groceries, and your transportation to your children’s daycare gets dragged away from you. Even the words bankruptcy and repossession make millions of Americans shudder. But how much do you understand about these processes? Do you know what is safe from bankruptcy and repossession and what is not?

Separating Terms in Bankruptcy and Repossession

We often hear these terms paired together: bankruptcy and repossession. We, Groce & DeArmon, P.C., are guilty of using these terms side-by-side like this as well, but the two terms do not have to go together. In fact, one can save you from the other, so let’s take some time to demystify the phrase bankruptcy and repossession.

Bankruptcy vs Repossession

Bankruptcy can be and often is a positive thing. If you find yourself drowning in debt and can’t tread water much longer, there is no shame in contacting a bankruptcy attorney and filing for either Chapter 13 or Chapter 7 bankruptcy. Some bankruptcies take payments off your hands completely; others make payments more manageable.

Repossession occurs when you cannot make payments on debts secured to an expensive item. (We’ll go into what debts are typically secured in the next section.) A repossession can occur at any time, regardless of whether you have filed for bankruptcy or not. If you continue to drown in debt and choose not to pay a certain bill, you could find yourself getting a repo notice.

What Can Get Repossessed?

Only items that secure or insure your debt can be repossessed. So what does it mean when an item secures your debt? Let’s say your refrigerator breaks. You need a new one but can’t afford to buy one outright. You go a store that offers rent-to-own payments that allow you to use a refrigerator as you purchase it in payments over time. This payment plan puts you in a position where you own the refrigerator on the promise that you will pay the company back for it. In a sense, you have taken a loan from the company for the price of the refrigerator, and the company allows you to do this under the assumption that they can (and will) take that refrigerator back if you do not pay them. The refrigerator secures the debt and allows them to loan you the money. They can get their money back by repossessing the refrigerator.

The most common items to be repossessed are vehicles and houses. When a creditor comes to repossess your house, it is called a foreclosure. Although bankruptcy cannot eliminate these secured debts, bankruptcy can free you of other bills that make it impossible to pay your car loan or mortgage. This is one reason why bankruptcy and repossession are often paired together. Anyone on the verge of repossession should consider filing bankruptcy to keep their property from the hands of creditors.

Talk to a Groce & DeArmon, P.C. Bankruptcy Attorney Today

A local bankruptcy attorney can really help you get the best results. Whether you are looking for a Chapter 13 bankruptcy repayment plan or a full Chapter 7 bankruptcy, our law firm is here to help. Don’t wait to watch your car get towed away from you; get the help you need now.

Bankruptcy and Repossession: What You Need To Know

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What to know about bankruptcy and repossession

If you are in debt and considering bankruptcy, one looming fear is the possibility of repossession. For those who are in debt and are unable to pay them off, the repossession of assets is a possibility that will be difficult to completely avoid until the process is over.

With that being said, there are several different factors that play into bankruptcy and repossession. There are times when you make enough money to avoid forfeiture of assets, but more often than not, repossession will at least play a role in your repayment efforts. This is typically done through chapter 7 bankruptcy filings, and in today’s post, Groce & DeArmon will walk through what you need to know about bankruptcy and repossession.

Any Item Can Be Repossessed — If It Was Purchased Via Loan

When it comes to bankruptcy and repossession, people often think of cars. While cars are the item most likely to be repossessed and the item that we see repossessed the most often, it is not the only item that can be taken. In fact, any item that you purchased via loan and are still paying for can be repossessed.

This includes your car, television, appliances, or even instruments. You name it. If it was purchased through a loan and you are still paying that loan off, repossession is a possibility.

Filing For Bankruptcy Enacts An Automatic Stay

One of the benefits of filing for bankruptcy is that it will place an automatic stay on any repossession processes that you and your property are currently subject to. This doesn’t eliminate the possibility of future repossession, but this is an example of how bankruptcy and repossession often work to balance each other out. Filing for bankruptcy allows you and your family some time to figure out your financial situation before having property repossessed.

It is important to understand this stay from a legal standpoint because it makes any repossessions illegal. If your property is repossessed during this stay, alert your bankruptcy and repossession lawyer immediately.

Chapter 7 Bankruptcy Exchanges Property

Chapter 7 bankruptcy is the most common chapter of bankruptcy in the United States, and it is centered around the exchange of nonexempt property for the discharge of debts. Exchanging property for discharge isn’t exactly a repossession, but it’s important to know that loss of property is a legitimate possibility when filing under Chapter 7.

Filers of Chapter 7 bankruptcy will almost always leave the courts with less stuff than they had before they entered. This is a viable alternative to repossession if you are eligible because it allows you to gain a bit of control over what you will lose and makes sure that you don’t lose essential assets.

Contact Your Bankruptcy and Repossession Lawyer Today

If you are facing bankruptcy and repossession, it is crucial that you get in contact with an attorney to represent you immediately. At Groce & DeArmon, we specialize in bankruptcy claims, specifically Chapter 7 and Chapter 13, and we would love to help you. Give us a call at (417) 862-3706 or contact us online to schedule a free consultation.

How to Recover From Bankruptcy and Repossession

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Man stressed out about bankruptcy and repossession

Bankruptcy and repossession are among the worst situations that one can find themselves in. Unless you have the income to pay off your debts over time with a Chapter 7 filing, you will likely be forced to liquidate assets to pay off debts. Roughly 70% of bankruptcy cases are Chapter 7 filing, which means that most Americans are forced to liquidate assets to get out of debt, often times through repossession. If this has happened to you or it is currently happening to you, it can be hard to see the light at the end of the tunnel. The Groce & DeArmon blog is here to tell you why there is still hope and there are ways to recover.

Understand Why Bankruptcy and Repossession Happened

The aftermath of bankruptcy and repossession is a process – a particularly long and winding process. It is good to start this process with some introspective observation. Why did this happen? How did this happen? Life doesn’t end with bankruptcy and repossession. At some point, hopefully, sooner rather than later, you will be looking for a car or a house. It’s important to remember what mistakes were made and led to bankruptcy and repossession so that you won’t make those same mistakes in the future.

Find Out What Your Options Are

Each individual instance of bankruptcy and repossession are unique, so they there may even be options in what happens to your assets. Often, banks and repossession companies will work with you to get your car back by paying back the loan or setting up a payment plan. However, you also have to consider our last section. Even if they will help you get your car back, will you be able to pay for it? Is it a wise decision. And if you are really in dire straights, would you be able to pay for the insurances, gas money, and maintenance on top of the loan?

So while there may be options for you to keep your assets, it may not be wise to do so. If so, it’s important to sit down with a bankruptcy attorney and find out what is best for you in your situation and context.

Planning For the Future

Once the dust settles on bankruptcy and repossession, life goes on. Which means it’s time to make a plan for moving forward. This can’t happen unless you understand your debt and know your capabilities. It is vital that you don’t bite off more than you can chew in your recovery process. You may have to downsize significantly with your housing or use public transportation for a while. You may need to work overtime or find another job. These things aren’t ideal, but they will help to set up your long-term future in a way that is manageable.

Groce & DeArmon, P.C. Want To Help

The road to recovering from bankruptcy and repossession is a long one and we don’t sugarcoat that. However, Groce & DeArmon, P.C. exists to help people like you handle your debt. Contact us today at (417) 862-3706, call us toll-free at 1 (800) 640-3706, or visit our website for more information.

How will Bankruptcy and Repossession Affect my Cosigner’s Credit?

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How Bankruptcy and Repossession Affects a Cosigner’s Credit

Credit report after bankruptcy and repossession

When you purchase a vehicle, your creditor may require a cosigner. A cosigner, also known as a guarantor, is responsible for paying back your debt if you cannot, acting as a kind of insurance for creditors. To prove they can be held responsible for your debts, cosigners need a strong credit score. If you file for bankruptcy and repossession, you may worry about how your decision will affect your cosigner’s credit. Below, the Groce & DeArmon bankruptcy attorneys provide some helpful answers.

Cosigner Responsibilities For Bankruptcy and Repossession

In a bankruptcy and repossession case, a cosigner is responsible for paying any leftover debts you cannot pay. The repossession process is relatively simple. To recoup any lost money, a creditor will first attempt to sell your vehicle at auction. Because a vehicle’s value usually depreciates over time, a creditor most likely will not recoup all of their money. If this is the case, the creditor will turn to you to pay the rest of the money, but if you cannot pay, your cosigner is held responsible. If the cosigner cannot pay, the creditor can sue in court.

Your Cosigner’s Credit

Generally, your decision to file for bankruptcy and repossession should not hurt your cosigner’s credit. Although they are held responsible for your debts, their credit score should remain the same. Unfortunately, in some cases, problems may arise.

Ten or fifteen years ago, cosigners would have been grouped into your bankruptcy and repossession case, which negatively impacted their credit score. This occurred because the standard credit reporting system at the time (known as “Metro”) assessed credit reports by accounts, not individuals. If one person on an account filed for bankruptcy, everyone was included for credit reporting purposes.

Today, credit reporting institutions use a modified reporting system called Metro 2. Instead of assessing credit reports by accounts, Metro 2 assesses by individuals, so when you file for bankruptcy and repossession, you should not impact your cosigner’s credit. Although Metro 2 is the standard, some credit reporting institutions have stuck with the old system. The chances of your bankruptcy case affecting your cosigner’s credit may be slim, but problems still occur on occasion.

Contact Groce & DeArmon, P.C.

Bankruptcy and repossession can be a complicated and confusing process. To make sure you have the protection you need, seek legal aid from a bankruptcy attorney. At Groce & DeArmon, our team of experienced attorneys ensures you know your rights by giving you the tools you need to understand bankruptcy, foreclosure, and repossession. To get the legal aid and representation you need, contact Groce & DeArmon today.

Myths About Bankruptcy and Repossession

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Bankruptcy and repossession letter

Repossessions are a common occurrence when you have built up debt and are on the path for filing bankruptcy. If you have neglected to make payments on your automobiles, then a creditor may come and take ownership of that asset. While this may or may not be the case for every individual who is behind on payments, there are some unfortunate myths that have become widespread about the process of bankruptcy and repossession. At Groce & DeArmon, P.C., we want to make sure our clients are informed on this matter, which is why we took the time to debunk some of these common misconceptions about vehicle repossession.

MYTH: You Must Be So Many Months Behind Before Repossession Happens

One of the largest myths regarding bankruptcy and repossession is that there has to be a certain number of months without payments before a creditor will attempt to repossess your car. Many people tend to associate about two to three months as the standard cutoff. Regardless of what the general consensus of time might be, this is a completely false assumption. Your assets can be repossessed from the first day you neglect to make a payment. While this may not always be the case, it is crucial to know just in case the occasion were ever to arise.

MYTH: If Your Car is Repossessed, You Don’t Owe Any Further Money

“Hooray! My car is gone. Now I don’t have to worry about paying off the debt anymore!” Wrong. The notion that a repo cancels the obligation for paying off debts is another myth about bankruptcy and repossession. When you signed a contract upon purchasing your vehicle, you agreed in writing to pay for it in full, so you will be held accountable. It is very rare that a repossession would completely eliminate your missed payments. In the end, it will usually be up to the bank or financial institution to decide what actions will be taken.

Related Post: Bankruptcy and Repossession: What Is at Risk of Repossession?

MYTH: Partially Paying Your Debt Will Send the Creditor Away

Many people assume that they can waive off the need for a repo if they toss a partial amount of money to the creditor. This is not the case, as you will still owe money, thus preserving your status as behind in payments. The lenders will want to see the money in full and nothing else, and if you don’t have it, then you can say goodbye to your car. This widespread bankruptcy and repossession myth has caused many people confusion when the repo person shows up, so it is important to understand the technicalities of the process.

Related Post: Explaining Bankruptcy and Foreclosure Misconceptions

Contact Groce & DeArmon, P.C. for Bankruptcy and Repossession Assistance

Enough with the myths. If you are really wanting to eradicate the threat of a repo, then filing for bankruptcy protection may be a legitimate solution for your situation. If you are in need of assistance with the dealings of bankruptcy and repossession, then contact Groce & DeArmon to set up a free consultation.

Bankruptcy and Repossession: How to Protect Your Vehicle from Creditors

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The Repo Man Coming for a Car During Bankruptcy and Repossession

Bankruptcy and repossession are both ominous and dreaded things to talk about, but they are absolutely a reality for many individuals in financial distress. If your vehicle has just been repossessed or you have received several pre-repossession notices from your lender, filing Chapter 7 or Chapter 13 bankruptcy may help you get your vehicle back or prevent it from being taken in the first place.

Related Post: How to Reclaim Your Car After Repossession

Reasons for Repossession

If you have fallen behind on your payments, failed to maintain car insurance, or have otherwise defaulted on your car loan, your lender may repossess your vehicle. Although a lender cannot remove your car from a closed garage or breach the peace (aka cause you physical harm) while repossessing your vehicle, your lender may lawfully repossess your vehicle without prior notification.

When it comes to bankruptcy and repossession, most lenders will send notices to get you to pay something on your loan. But if you refuse to pay, or you simply cannot pay, the repo man will be paying you a visit eventually.

How to Protect Your Vehicle from Creditors

If you have fallen behind on your payments and are struggling in other financial areas of your life, your lawyer may have suggested bankruptcy as a valid option. Filing for Chapter 7 or Chapter 13 bankruptcy may help protect your vehicle from repossession. There are also a few things you can do to avoid repossession.

 

  • The automatic stay. When you file for Chapter 13 or Chapter 7 bankruptcy, an automatic stay is created. This prohibits most creditors from continuing their collection efforts against you. Once a judge approves your repayment plan, as long as it takes care of any outstanding payments you’ve missed, your lender cannot repossess your vehicle. If your car has already been repossessed before you file for bankruptcy, you may be able to get it back if your repayment plan addresses your overdue payments.
  • Catch up on your payments. Another way to avoid vehicle repossession is to catch up on your missed payments and get your lender off your back. Of course, this may not be easy if you are several payments behind, but if you can afford to pay the past due amount, it is highly recommended.
  • Talk to your lender. The truth is, your lender just wants you to pay something on your loan. Even if you can’t afford your monthly payment on your car, you can always call your lender and try to negotiate the terms of your payment plan. You may be able to work out a lower monthly payment that you can afford. Bankruptcy and repossession don’t have to go hand-in-hand. Talk to your lender to find out what your options are.

Related Post: Will Chapter 7 Bankruptcy Stop Vehicle Repossession?

We Can Help with Bankruptcy and Repossession

If you’re struggling with bankruptcy and repossession, a bankruptcy attorney can help you sort out the mess. Vehicle repossession is always stressful and messy, but there are ways a bankruptcy lawyer can assist you in avoiding that situation.

Call the law firm of Groce & DeArmon, P.C. today to schedule your free consultation with one of our attorneys. Our lawyers are familiar with the issues concerning bankruptcy and repossession. We will gladly listen to you and help you file Chapter 7 or Chapter 13 bankruptcy, if necessary. Don’t let your lender or other creditors push you around. Consult with an attorney today and get back on the road to progress.