Person looking out window in fear

Don’t Live in Fear of the Repo Man! How to Keep Your Car with Chapter 13.

If you live in Middle Tennessee, you probably rely on your car or truck as your sole form of transportation to get to work, run errands, and go to the doctor.  If you get behind on your car payment, the lender may choose to repossess your car.  Without a car, you may not be able to get to your job, travel to your doctor appointments, go to the store, or pick up your kids from school.

Stop living in fear!
If you are behind on your car payment, you may be at risk of repossession.  If you’re behind on your car payment, chances are you may also be behind on other bills like credit cards, medical bills, and other loans.  It can be overwhelming to try to catch everything up at once.  Did you know that filing a Chapter 13 bankruptcy can instantly put a stop to any threat of repossession?  Chapter 13 can also help you catch up on your other bills as well.

Here’s how:
Your attorney will help you establish a repayment plan of your debts, which will include your monthly car payment and the arrears (the amount you are behind).  A Chapter 13 plan typically includes all of your debts and allows you to repay them over a 3 – 5 year period of time.  Much of your debt may be paid back at a reduced rate, so not only do you have more time to pay back your debt, you are paying a lower amount.  This can also be true for many car loans.  Chapter 13 bankruptcy may help you reduce the monthly payment, the interest rate, and even the balance on the loan.

The moment your bankruptcy case is filed, the automatic stay goes into effect.  The automatic stay is a restraining order against your creditors.  Your car becomes part of the bankruptcy estate, and your creditors cannot touch property of that estate without Court permission.

What if my car has already been repossessed?
If your car has already been repossessed, the law requires the lender to hold onto the car for 10 days.  After 10 days, the lender has the right to sell the car at auction, which means you will not be able to get it back.  If the lender sells the car for less than what you owed on the loan, they can still collect the difference of the balance of that loan from you, which is a lose-lose situation for you.

During this 10 day period, the lender must give you the opportunity to redeem the vehicle, which means you must pay off the balance of the loan in full in order to get your car back.  For most people who are already struggling financially, coming up with a large sum of money is just not possible.

How to get your car back after it has been repossessed
Filing for Chapter 13 bankruptcy may help recover your vehicle – but you must act quickly!  If your car has already been repossessed, contact our office immediately to discuss your options with an attorney.
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If you’re behind on your car payments, or if your car has already been repossessed, don’t wait and run the risk of losing your vehicle forever.  Contact us today for a FREE, no-obligation consultation to discuss your options with a qualified bankruptcy attorney.