Your car just got repossessed! The first thing that comes to mind is, how are you going to get to work? How are you going to pick up your child or take your child to school? This can be a very scary thing. The bankruptcy court allows you to file for bankruptcy to get your vehicle back.
If a client approached us stating that their car was recently repossessed, the first question I have is, “do you even want to keep this car?” We lead with this because often times our clients have expensive car payments and the reason they are falling on financial hardships is because they cannot afford their expensive car payment. Another reason a client may not want to keep their car is because there is still a large amount owed and the car is worth nowhere near the payoff.
If you do not want to keep your car and the car has been repossessed, a chapter 7 bankruptcy would allow you to discharge the remaining amount owed on the vehicle. In this case, you would not be able to get the vehicle back, but if you have a vehicle you could borrow for a few months, you could file for bankruptcy and get a new car within a few months.
Going even a few months without a vehicle isn’t always an option for our clients and we understand that. If you need your car now and you decide that you can afford the car payment, filing for chapter 13 bankruptcy would allow you to get your car back within a couple days. The chapter 13 bankruptcy would set you up on a payment plan with the court. You would make one monthly payment to the court and the court would make the car payment on your behalf. This gives your creditor the assurance that payments will be made and also allow you to catch up the delinquent car payments over the life of your bankruptcy.
Losing your vehicle can pose many problems that you may never have even considered. If this issue comes up, please give us a call and set up a free consultation. We will be able to discuss your options and explain exactly how this process will work.