Using Chapter 13 Bankruptcy to Recover Your Repossessed Vehicle
Having your vehicle repossessed due to missed payments or defaulting on an auto loan can really throw a wrench in the gears of your life. As your mobility plays a large part of your overall freedom, losing your primary method of transportation due to financial hardship can be devastating. Unfortunately, most people who have their vehicles repossessed do not have the necessary funds to redeem their car, buy it back at auction, or reinstate their auto loan, leaving them with seemingly no remedy for their situation. Fortunately, you may be able to get your repo’ed car back by filing for Chapter 13 bankruptcy.
Chapter 13 bankruptcy is a reorganization of your assets and debts that requires you to make monthly payments towards your debts over a period of 3-5 years, with any remaining non-secured debts being discharged upon completion. When you file for bankruptcy, a court injunction known as an “automatic stay” is issued that protects you against any and all creditor communications and collection efforts – including foreclosures and vehicle repossessions. If you file for bankruptcy prior to the auction or resale of your vehicle, this automatic stay will prevent the creditor who repossessed your vehicle from taking any further actions to collect on the debt without first obtaining court permission.
In order to recover your vehicle, you must:
File a Chapter 13 repayment plan that shows that you can immediately resume making monthly car payments and will bring your payments current through the plan.
Show the bankruptcy court that your repossessed vehicle is a necessity and that you can afford your monthly payments through documentation of your income.
In most cases, a lender will willingly release your vehicle back to you upon receiving notice of your bankruptcy filing and Chapter 13 repayment plan. If they refuse, the courts should order your lender to return your vehicle as long as you have fulfilled the above requirements.
In addition to helping your recover your car, Chapter 13 bankruptcy may also be useful as a means of lowering your monthly car payments. Depending on the value of your vehicle, your interest rate, the remaining balance on your loan, and the length of time that you have owned the vehicle, your Chapter 13 filing may allow you to either reduce your interest rate or lower the balance of your loan to match your vehicle’s actual value.
Recover Your Vehicle Today
If you have had your vehicle repossessed or are in danger of repossession due to financial distress, contact Albaugh Law Firm today. Our knowledgeable St. Augustine and Jacksonville bankruptcy attorneys can help determine if Chapter 13 is right for you and guide you step-by-step towards a debt-free future.
Schedule a no-cost case review or get in touch with us online today to review your options.