Stop Repossession Or Get Your Car Back

Many people choose to explore their debt relief options when they are no longer able to make their monthly auto loan payments or their vehicles have recently been repossessed. Others put off taking action because they are worried about losing their cars should they file for bankruptcy. Getting to and from work and meeting family and social obligations can be extremely difficult without reliable transportation, but the U.S. Bankruptcy Code contains provisions designed to keep debtors in their vehicles and on the road.

If You Are Worried About Losing Your Car

The automatic stay that is issued when you file for personal bankruptcy puts an end to all collection activity. It will prevent auto financing companies from repossessing vehicles even when loans are seriously delinquent.

If you file for Chapter 7 bankruptcy, you will likely be able to keep your vehicle under the personal property exemptions. If you choose to file for Chapter 13 bankruptcy, lenders may not repossess your vehicles if you include arrears in the Chapter 13 payment plan and make payments in a timely manner.

The bankruptcy laws were not written to punish misfortune or poor decisions. Our experienced debt relief attorneys at Ast & Schmidt, P.C., of Morristown can explain how these laws might allow you to keep your car while offering you a fresh start.

If Your Car Has Already Been Repossessed

Finance companies generally sell repossessed vehicles and apply the proceeds to the outstanding loan balance, but they must obtain court permission before doing this once the automatic stay has been issued. This puts lenders in a difficult position and provides debtors with a number of options:

  • Negotiate with the bank Lenders faced with an automatic stay may agree to modify the terms of your car loan and lower the payments to avoid going to court.
  • Redeem the vehicle — Under the Bankruptcy Code, debtors have the option of buying their repossessed vehicles back for their fair market values rather than their loan balances. This may be a prudent choice if you owe money on a car that has depreciated heavily.
  • Include your auto loan arrears and monthly payments in a Chapter 13 payment plan Lenders cannot repossess a vehicle covered by a Chapter 13 payment plan as long as the payments are made on time.

End The Anxiety And Get The Answers You Need

A difficult financial situation can become worse when a vehicle is repossessed, but pursuing debt relief by filing a personal bankruptcy could stop this from happening. If you live in New Jersey and would like to learn about the options you have when your vehicle has already been repossessed or learn how an automatic stay could help you keep your car, please contact our lawyers for a free consultation by calling 973-984-1300 or completing our online form.

Ast & Schmidt, P.C., is a debt relief agency. We help individuals file for bankruptcy relief under the Bankruptcy Code. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.