How Could Bankruptcy Help You With Vehicle Repossession
There are several reasons you might be considering bankruptcy- maybe your creditors are pursuing a judgment against you or are even already garnishing your wages. Maybe you are juggling too many credit cards and can’t keep up with the interest payments. But one of the most common reasons that people come to us considering bankruptcy is because they are facing a repossession.
Losing your vehicle can make an already bad debt situation even worse. Having a vehicle could be essential for you to get to work, drop your kids off at school, and more. The repossession will show up on your credit report, bringing down your score and making it harder to qualify for new lines of credit. And if your car is sold at auction for less than your loan’s balance, you could still owe that repossession deficiency to your lender. That’s why when you’re behind on auto loan payments, you should take every step possible to make sure your vehicle isn’t repossessed- and bankruptcy may be able to help. At the Law Office of Erik Severino, we have helped countless clients in situations like yours save their vehicles and fix their debt situations. Call 702-370-0155 to set up your free consultation today.
Can Bankruptcy Stop a Vehicle Repossession?
When you file your bankruptcy petition, you are immediately covered by the protections from the automatic stay. The automatic stay prevents your creditors from doing several things to collect debts during your bankruptcy, like garnishing your wages, levying your bank account, and most relevant here, repossessing your vehicle. The automatic stay keeps your creditors at bay for the length of the bankruptcy, in most cases. In a Chapter 7 bankruptcy, this is 3-6 months. A Chapter 13 bankruptcy lasts either 3 or 5 years.
If your lender is looking to repossess your vehicle, you need to stay on top of your bankruptcy case to make sure the automatic stay remains in place. Your case could be subject to an “exploding stay” if you are re-filing after previous case dismissals. Your auto lender could also petition the court for relief from the automatic stay. Call our office for your free consultation if you’d like more information about halting a vehicle repossession with the automatic stay.
Hiding Your Car to Avoid Repossession
The terms of most auto loans are quite strict, and your vehicle can be repossessed shortly after you miss a payment. The repo man could be after you even while you are preparing your bankruptcy petition, and you may need to buy some time. As aggressive as the repo man may be, he’s not allowed to break into your home to repossess your vehicle. If you have a garage, you should keep a vehicle on the brink of repossession locked securely inside. You should also make sure to remove any GPS trackers inside your vehicle if you do need to drive it somewhere outside of your garage.
Not everyone is so fortunate as to have a private garage in which to store their vehicle. If so, you may want to consider switching cars with a friend or neighbor, or at least storing your vehicle at their property. If that person lives in a different state, even better. You can also park your car in a chained or gated compound. If the repo man is in this close of pursuit of your vehicle, you may want to consider an emergency bankruptcy filing.
Emergency Bankruptcy Filings
Bankruptcy files strong and comprehensive protections to people struggling with debt, but it can also take a long time to prepare a bankruptcy petition. An emergency bankruptcy filing is a procedure that allows you to file bankruptcy more quickly to evoke the protections from the automatic stay. You can expect a standard bankruptcy petition to be well over 50 pages long, with detailed information about every aspect of your financial situation. But an emergency bankruptcy petition, also known as a skeleton bankruptcy petition, requires far less information. When you file an emergency bankruptcy petition with an attorney, you will only need to provide a basic intake sheet, 6 months of pay stubs, your credit report (for a list of your creditors), and to complete your first credit counseling course. Many people can prepare everything necessary for an emergency bankruptcy filing in just a few hours. You will have two weeks to file the rest of your bankruptcy petition after filing an emergency bankruptcy petition with the court.
Repossession and Chapter 7 Bankruptcy
The automatic stay stops vehicle repossessions in both Chapter 7 and Chapter 13 bankruptcy. But stopping a vehicle repossession may only be temporary in a Chapter 7 bankruptcy. You can’t discharge secured debt in Chapter 7 bankruptcy and keep the asset associated with it. If you are still behind on your car payments when your Chapter 7 bankruptcy is discharged, your lender can then come back for the repossession. You also need to continue making your regular payments during your bankruptcy. If your balance is too large to rectify in the 3-6 months a Chapter 7 bankruptcy takes, you may want to consider Chapter 13 bankruptcy instead.
Repossession and Chapter 13 Bankruptcy
When you are behind on payments like your auto loan or your mortgage and your lender is threatening to repossess, a Chapter 13 bankruptcy will give you a significant amount of time to catch up on your payments. Chapter 13 bankruptcy reorganizes debts into an income-based payment plan. Secured debts (usually excluding mortgages) are paid in full in a Chapter 13 payment plan, including any past-due balances. That means that however much you are behind on your car payment will be spread out over 3-5 years, all the while you are protected by the automatic stay. After your case has been discharged and the automatic stay has ended, your vehicle will be fully paid off, so your lender will have no cause to proceed with a repossession. Schedule your free consultation with our firm if you’d like more information about stopping a repossession with Chapter 13 bankruptcy and what your plan payments might be.
Can Bankruptcy Help Me Get My Car Back After It’s Been Repossessed?
If your vehicle has already been repossessed, it may not be too late for bankruptcy to help you. You may be able to have your vehicle returned if you file Chapter 13 bankruptcy before your repossessed vehicle has been sold. The automatic stay can stop a sale if it hasn’t already occurred. You will need to file a motion for turnover with the court. Here, you will need to prove two things to the court. First, you need to be able to show why it is necessary that you have the vehicle returned to you, whether it’s to get to school, work, medical appointments, etc. Second, you will need to show that you can pay your auto loan balance in full, including any arrearages, in your payment plan. You could even qualify to have your loan balance adjusted in a Chapter 13 bankruptcy- contact our law firm for more information.
Skilled Nevada Bankruptcy Representation with Budget-Friendly Payment Options
If you file your bankruptcy incorrectly, your case could be dismissed, which would cause a lapse in the automatic stay. This would give your auto lender an opportunity to repossess your vehicle while you’re sorting out your bankruptcy issues. Instead, leave it up to the professionals so you can rest assured knowing your bankruptcy will go smoothly. Las Vegas Bankruptcy Lawyers has decades of experience helping clients discharge debts and move forward with a better financial situation. We even offer post-filing payment plans starting as low as $0 down. To learn more, call 702-370-0155 or fill out our online form to get started with your free consultation today.