How To Avoid Auto Repossession And What To Do If It Occurs
If you fall behind on your car loan, it will not take long before the lender takes action to recover their losses. This is known as auto repossession. The prospect of repossession is a scary one as most people are dependent on their cars to get to work, buy groceries, transport children and other activities. The threat of auto repossession adds more stress to an already stressful time. If you are facing repossession or your car was just repossessed, you may have options.
At Miller & Miller Law, LLC, we have been helping people find solutions to debt problems for more than 25 years. We provide a holistic approach to debt resolution. We help people out of their immediate situation and help set them on the path to brighter future ahead. Repossession is something we deal with nearly every day. We can help, but you need to act fast.
If you are facing repossession, we can talk to you about options for keeping your car through a Chapter 13 bankruptcy. If your car has just been repossessed, you have a very short period of time to get it back. Call our law offices today at 414-326-9231. Our firm is based in Milwaukee, but we help people throughout Wisconsin.
Can A Lender Really Take My Car?
A car loan is a legal agreement between you and a creditor. If you fail to make payments on your car loan, your creditor has a legal right to repossess your car.
Most car loans spell out the rights and obligations of the borrower and creditor, including the right to repossess a car without having to go to court and without warning when loan payments are not received.
How Bankruptcy Can Help
If your car has not yet been repossessed and you cannot afford to pay all of the money that is owed, bankruptcy may be a good option. Bankruptcy will help you get rid of debt while giving you the time you need to get caught up.
As soon as a bankruptcy is filed, an injunction known as the automatic stay goes into effect. The automatic stay prevents creditors from undertaking collection actions against you. At the very least, this can delay the repossession of your car, if not prevent it altogether once you are able to bring your car loan current.
Depending on your circumstances, you may be able to get caught up on your car payments and pay off your car in a Chapter 13 bankruptcy repayment plan. A Chapter 13 likely will reduce your car payments and allow you to keep your car. We have helped many clients reduce car payments more than 50 percent.
Even if your car is repossessed, we still may be able to get your car returned to you. But you have to act fast.
The Car Repossession Process
When a car loan is defaulted on, the creditor who financed the car stands to absorb the loss. When this happens, creditors “repo” cars in order to resell them and recover a portion of the outstanding balance on their loans.
However, when a creditor decides to resell your car, you must be notified accordingly. If the car is resold at an auction, you must be notified so you can participate in the bidding process. Should a creditor decide to sell your car privately, you must be given an opportunity to pay off your loan and any storage fees or repossession charges added to your balance.
Other Ways We Can Fight For You
At Miller & Miller Law, LLC, in Milwaukee, we will make sure that your rights are respected and that your car lender will not take advantage of you even after repossession.
The actions of your creditor may impact whether or not they have a right to repo your car in the first place. Under the principle of estoppel, if your creditor has regularly accepted late payments (or payments not in full) without insisting that you adhere to the terms of your contract, their silence may be interpreted as acceptance of a change in original contract terms. If your car is repossessed, resold without notifying you or put up for bid at auction, you can sue your creditor for damages.
Deficiency Judgments In The Event Your Car Is Sold
When a car is sold for less than what is owed on it, a creditor may try to sue you for the difference. Suppose you owed $15,000 on a car that a creditor was only able to sell for $8,000. Here, a creditor can go to court and request a deficiency judgment in the amount of $7,000 — the difference between the $15,000 you owe and the $8,000 for which the creditor was able to sell the car.
In some cases, creditors don’t always follow proper procedure or notification protocols. When this happens, they may not have sufficient legal grounds for a deficiency judgment. Hiring an attorney to represent you and investigate what happened may help get your case dismissed.
The Advantage Of Chapter 13 Bankruptcy Over Chapter 7
Under the terms of Chapter 7, depending on its value, your car can be seized in order to pay your creditors all or a portion of what you owe them. Under Chapter 13 bankruptcy, debt on a car loan can be included in your repayment plan. Consequently, you stand a better chance of keeping your car under Chapter 13 bankruptcy.
In both cases, however, declaring bankruptcy will impose an automatic stay on any collection or repossession efforts on the part of creditors. Your recently repossessed vehicle will be returned to you within hours of filing a Chapter 13.
Time Is Of The Essence. Call Now.
Talk to an auto repossession lawyer at Miller & Miller Law, LLC, to learn more about how we can help you. You can reach our law office online or call us directly at 414-326-9231. Based in Milwaukee with offices in Madison and Kenosha, we proudly serve all of Wisconsin.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.