Falling behind on your car loan payments can feel scary and stressful, but all hope is not gone. If you are worried about your car getting repossessed, find solace in the fact that there is a way to keep it. Filing for Chapter 13 bankruptcy can protect your car from repossession and help you get back on track with a repayment plan. Learn how filing for bankruptcy can help you keep your car.
Automatic stay
If you are concerned about losing your car, you can have confidence in the automatic stay of Chapter 13 bankruptcy. As soon as you file, the automatic stay immediately stops your lender from being able to take your car. However, the automatic stay only prevents repossession until the judge signs off on your repayment plan; then repossession depends on your payments.
Repayment plan
As long as you stick with your repayment plan, you can keep your car during the bankruptcy process. Paying off your creditors through Chapter 13 bankruptcy usually takes between three and five years. You can prevent repossession provided your car payment is reasonable. Significant nonexempt equity can increase your repayment plan, although this is rare. As long as you continue to make your car payments and follow the repayment plan, your lender cannot take your car.
Reducing your loan
Because cars depreciate quickly, you might end up owing more than what your car is actually worth. In this case, Chapter 13 bankruptcy might be able to help you reduce your loan to match the value of your car. Any amount remaining becomes unsecured debt.
Seeing your car loan stack up can instill a sense of dread and uncertainty. But while it is normal to feel distressed, this debt does not have to end in you losing your vehicle. If you have more questions about the process of filing for bankruptcy and keeping your car, consult an attorney.
“Disclaimer – Attorney Advertising. Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not guaranteed. Dramatization – not actual clients in pictures and videos. Thomas C. McBride, attorney in Alexandria, LA.”