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.
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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.