Chapter 13 Car Repossession Lawyer
The threat of car repossession causes nightmares for many people who have fallen behind in payments and fear they are running out of options. After all, losing your car could mean losing your ability to get to work or school, triggering an eventual financial catastrophe.
At the Sasser Law Firm, our knowledgeable attorneys frequently work with clients who are facing car repossessions and need help fast. Our board-certified bankruptcy attorneys can act quickly to review your options and take the proper legal steps to protect you.
Contact us now to schedule a free consultation. You will meet directly with one of our skilled lawyers, who can discuss how to stop car repossession, whether through bankruptcy or other means.
How Can Bankruptcy Stop Car Repossession?
Although filing for bankruptcy is not the right move for everyone, it is a way to potentially stop a creditor from repossessing your motor vehicle. When you file for bankruptcy, the court issues an “automatic stay,” which prevents creditors from taking any further action against you during bankruptcy proceedings.
Your options for keeping your car will depend on what type of bankruptcy you choose to file:
Chapter 13 Bankruptcy
In a Chapter 13 bankruptcy, you are protected from creditors while you make a repayment plan to deal with your debts. When it comes to keeping your car from being repossessed, Chapter 13 may offer opportunities to:
- Pay off your car loan, despite being behind on your payments
- Increase the length of your loan to reduce the monthly payment amount by stretching payments over a longer time period
- Renegotiate the interest rate on your car loan, with the goal of lowering it to decrease monthly payment amounts
- Reduce the principal of the loan to match the value of the vehicle, known as a “cram down”
Chapter 13 bankruptcy has many other benefits as well, such as the chance to save your home from foreclosure. However, it requires you to take a hard look at your income and expenses to develop a strict budget and reasonable plan for repayment of debt.
Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, you agree to liquidate your assets in order to pay off as much of your debt as possible. However, there are ways to save your car from being repossessed in a Chapter 7 case:
- Reaffirming the debt. In a reaffirmation agreement, the debtor and the creditor agree that even after the bankruptcy case is resolved and other debts have been discharged, the debtor will still be responsible for the loan. This may make sense for you if other large debts are making your car payments unaffordable, but a discharge of those would get you back on track.
- Redeeming the loan. After filing for bankruptcy, you may be able negotiate a redemption of the loan. A redemption allows you to pay the lender the value of the motor vehicle in a lump sum. Of course, this means you must be able to come up with the money for the lump-sum payment. However, a redemption could ultimately save you money if the loan balance is much more than the current value of the car.
Although Chapter 7 bankruptcy gives debtors an opportunity for a clean slate financially, it is not the best option for everyone. It is important to talk to an experienced bankruptcy attorney about the best way to protect your car from repossession.
What to Expect If Your Vehicle Is Repossessed
Obviously, you know when you are falling behind on your car payments. However, you will likely not know how long a lender will wait to send a collections agency to repossess your vehicle. And the lender does not have to give you notice in advance of the repossession.
Once your vehicle has been repossessed, you can expect:
- The agency that took your car should notify you within 48 hours. You should receive a letter with information on how to contact the lender and the agency that repossessed your vehicle. The notification will also describe any personal items that were in your repossessed car and need to be picked up.
- Within 60 days (but likely sooner), the lender will send you a notice of intent to sell your vehicle. This notice will also explain any options for you to get your vehicle back. One option will be reinstating the loan by making any past-due payments and covering costs related to the repossession. Another option will be redeeming the loan by paying a lump sum along with fees related to the repossession.
- The lender must allow 15 days between the time you are notified of the intent to sell and the sale of your vehicle. This gives you time to weigh your options, consult with an attorney, and decide how to proceed. If the lender sells your vehicle for less than what you owe on your loan, the lender will still come after you for the deficiency balance, so it is crucial to seek legal advice before that happens.
If your car has been repossessed and you don’t know what to do, contact our knowledgeable attorneys to talk through your options. Our car repossession lawyers will provide a free consultation with no pressure to file for bankruptcy. In fact, we will be straightforward with you if we think there is a better option for resolving your situation.
What Happens If You Give Up Your Car in Bankruptcy?
If you decide that you no longer want to try to keep your car, you can surrender your vehicle as part of the bankruptcy process.
In some cases, the car may be worth less than what you owe on the loan. However, the deficiency balance is considered “unsecured debt,” which means it can be discharged (or forgiven) as part of the bankruptcy process.
Talk to a Knowledgeable Car Repossession Lawyer Today
At the Sasser Law Firm, you will work directly with an experienced car repossession attorney, not a paralegal or a legal assistant. Our dedicated legal team understands how serious and time-sensitive your situation is, so we will act quickly to assess your case and lay out your options.
Schedule a free consultation with our knowledgeable car repossession attorneys today to learn how we may be able to help. Our law firm serves people throughout North Carolina, including in Wake, Harnett, Johnston, Durham, Orange, Granville, Vance, Franklin, Warren, Nash, Lee, Chatham, and Moore counties.