Whether your car is at risk of repossession or has already been taken by your lender, filing for Chapter 7 bankruptcy can be a wise decision. When you file, you can consider how you will keep your car. Or, if you prefer to let go of your vehicle and don’t want to worry about the money you owe to your lender, you can get this relief through bankruptcy. Your Hagerstown, MD bankruptcy attorney can walk you through how filing for Chapter 7 bankruptcy can help you deal with a potential repossession of your car.
How Bankruptcy Can Temporarily Stop Car Repossession
When you file for Chapter 7 bankruptcy, your car loan lender cannot repossess your car for a certain period. A bankruptcy filing can make the automatic stay come into effect, preventing all creditors from trying to collect your debts. But your lenders can file a motion to have the court lift the order. A judge may grant this motion if you are behind your car loan payments. When this happens, your lender can repossess your car.
Can You Get Your Repossessed Vehicle Back?
If your lender has already repossessed your vehicle, you might be able to get it back when you file for bankruptcy. But you must move quickly to make sure the car is still available to you. Often, lenders will sell repossessed vehicles at auction within one week. Thus, you can only get your car back when you file for bankruptcy before the lender puts it up for sale.
Keeping Your Vehicle Through Bankruptcy
As the bankruptcy automatic stay is in effect, you can prevent your lender from repossessing your car or getting your repossessed car back. During this time, you can catch up on your missed loan payments, negotiate with your lender for new loan terms, or purchase the car in one lump sum payment. If these practical solutions do not fit your financial situation, and you still want to keep your vehicle, consult with your bankruptcy lawyer if you can achieve this goal by filing for Chapter 13 bankruptcy.
A lot of bankruptcy lawyers provide free consultations, and you must take advantage of this to get expert advice on handling the possible repossession of your car. The best attorney is willing to answer any questions you may have, explain your legal options, and help you make a decision on how to best get relief from your debts.
