How to Stop Repossession & Keep Your Car
Experienced Detroit Area Repossession Lawyers | Wayne, Macomb & Oakland County
No one ever plans to get over their head in debt. But sometimes bad situations happen to good people and they fall into a difficult financial situation through no fault of their own. Many people’s biggest concern when they are in a debt situation is keeping their car. Our experienced debt resolution and bankruptcy lawyers can help get you out of this rut and back on the road to recovery.
Filing Chapter 13 Bankruptcy can help you stop repossession and keep your car, while paying off your past due amount over time. Or, if you do not want to keep your car, filing Chapter 7 bankruptcy can delay repossession – giving you the time you need to find new transportation.
The best way to prevent or delay a repossession is to consult an experienced bankruptcy lawyer as soon as possible. There are many things that a debt resolution lawyer can do to help you protect your property from creditors. Our skilled bankruptcy lawyers have helped thousands of individuals in Wayne and Oakland County keep their cars and get the fresh start they deserve.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy does not permanently prevent a car repossession. However, Chapter 7 can temporarily delay the lender from repossessing your car – which will allow you more time to negotiate or to get caught up. Also, Chapter 7 can get rid of other debts (credit card bills, medical bills, judgments, etc.) freeing up enough money for you to start making your car payments again.
When you file for Chapter 7 bankruptcy, an automatic stay is put in place that prohibits most creditors from continuing ANY collection activities. This means that your lender cannot repossess your car without getting the Court’s approval. However, a Chapter 7 Bankruptcy usually lasts only a few months – so once your case is closed, there is no stay and the lender is free to repossess the car.
And, the lender can ask the Court for permission to repossess the car BEFORE the Chapter 7 is closed. So, unless you can show that you are making payments and attempting to catch up on your arrears, most Chapter 7 judges let the lender repossess before the case is over.
Chapter 13 Bankruptcy
Stop Repossession & Keep Your Car
When you file for Chapter 13 bankruptcy an “automatic stay” is put in place that prohibits most creditors from continuing collection efforts against you – this includes preventing your car loan lender from repossessing your car.
You can usually permanently keep your car if you file for Chapter 13 bankruptcy. If you are behind on car payments, you can make up the arrears (catch up on past payments) through your Chapter 13 repayment plan and avoid repossession. As long as you stay current with your payment plan on the past-due notes, and continue to make the new payments on time, you can keep your car!
Additionally, if you are upside down on your car loan (you owe more than the car is worth), you might also be able to reduce the amount that you owe on the car loan to the current ‘replacement value’ of the car. This can substantially lower what you owe, as well as lower what your car payments will be.