If you have fallen behind on your car payments, repossession can be right around the corner. It can be a shock to walk out of work or your home and find your vehicle has been taken! Living without transportation can be challenging for you and your family. Filing bankruptcy can stop repossession.
In both a Chapter 7 and a Chapter 13 bankruptcy, an “automatic stay” goes into effect as soon as you file. The “automatic stay” prevents most creditors from continuing to pursue collection efforts against you while you are in your bankruptcy, including repossession.
If you file a Chapter 13 bankruptcy, you typically have three options:
Surrender your car
Pay what you owe over 3 – 5 years
“Cram down” your loan – In a Chapter 13 bankruptcy, you may be able to reduce the amount you owe on your car to its current value. This is called a “cram down.” You may also be able to cram down your interest rate to much lower than what you have on your loan. Your bankruptcy attorney has experience with cram downs and will be sure to use this option if possible.
It is possible to keep your car when you file bankruptcy. The key is to act fast and speak with a qualified bankruptcy attorney, such as King & King, at the first sign of financial trouble. The sooner you get a case number, the sooner collection calls and repossessions are put to a stop. We have the background you need to get a fresh financial start, and can help you organize your debts in a way that fits your budget. Call us today for a free consultation at 404-524-6400.