By Robert J. Semrad | Published August 21 2014 |
Can Chapter 13 Bankruptcy Help Me Get My Car Back?
If you’re anything like millions of Americans, your car is one of your most loyal companions. You rely on your car, truck or SUV to get you to work, to school, or wherever it is you need to go each and every day. But what if your vehicle – and your freedom - were taken away?
All it takes is a few missed loan payments and your lender can repossess your car. Once you’re given notice, you only have a certain amount of time to get current on payments – or the lender could sell your car to a third party as reimbursement for the money you owe.
It’s a sticky situation: Most folks fall behind on payments because they’re struggling financially. However, in order to afford getting your car back, you need to be able to get to work and earn a paycheck – which requires transportation, i.e. your car.
If your car has been repossessed, or is at risk of being repossessed, you may understandably feel like you’re out of options. But there’s one option you may have overlooked: bankruptcy.
Filing for Chapter 13 bankruptcy may be your best bet for getting your car back. Not only that, but it can help you catch up on missed payments so that you can keep your vehicle without worry.
Chapter 13 bankruptcy is well known for its power to stop foreclosure thanks to a legal action called the automatic stay, which goes into effect immediately upon filing. The same feature that prohibits lenders from taking your house also keeps them from selling your car.
Under your Chapter 13 bankruptcy plan, you’ll make up missed payments and finish paying off your loan through a court-approved repayment plan. Since payments are determined according to what you can afford, they will typically be lower than what you were paying before. In some cases, Chapter 13 may allow you to lower your interest rate or reduce your loan balance to the current value of your car.
Once your repayment period comes to an end, any remaining debt is typically discharged.
If you’re behind on car payments, it’s only a matter of time before your car is repossessed and sold to someone else. If you want to keep your car, you need to take action. Our bankruptcy lawyers can help you keep your vehicle or get your car or truck back – and often at a lower payment.
Learn more about bankruptcy and your options for debt relief when you schedule your free one-on-one debt analysis with an experienced Debtstoppers bankruptcy attorney.