Updated: Sep 30
Something most of our clients depend on is their vehicle to get to and from work, to bring their kids to school and activities, to get groceries. The loss of a vehicle could be a detriment to an entire household or family. A repossession can feel like a failure, an embarrassment, or it could even be the loss of a job or opportunity. So what would it mean if you could save your vehicle?
It is the right of a creditor to seize a vehicle when a loan is defaulted. Once the loan is in default, the creditor then has the right to repossess. They may come onto your property and take the vehicle without any notice.
How to Stop Repossession
There are some cases where the answer could be filing a bankruptcy. Once you retain a bankruptcy attorney, you may be protected under an automatic stay. This is a process that halts repossession, foreclosure, wage garnishment, lawsuits, and collections. However, the lender can file a Motion to Lift the Stay which essentially asks the bankruptcy court if it can proceed with the repossession. The court will allow this in many cases unless you plan to redeem the vehicle. You can file a Chapter 7 and pay the trustee a lump sum based on the value of the car considering its age and condition. Sometimes letting the car go and filing bankruptcy can be the best solution. In any case, you should consult an attorney to be sure you are protected.
Chapter 13 is an Option
An automatic stay can apply here as well. The difference is your arrears will work into a payment plan worked out with the Chapter 13 trustee. This plan can last 3 to 5 years and is best worked when there are other debts that can be included in the plan.
Where to Begin
It is most advisable to consult an attorney. Once you retain an attorney and the stay is in place, an attorney can evaluate your situation and help set up a course of action that will benefit you most. There are options available and a professional can help you make the right decision for you.
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