Most people can’t afford to pay for a car outright, so they end up taking out an auto loan to finance their vehicle purchase.
Even though it is still considered “buying” a car when you take out a loan, it’s important to remember that your creditor actually owns the vehicle and can repossess it if you fail to make payments.
Some loan agreements state that you creditor doesn’t even have to take you to court and can repossess your vehicle without warning. The reason creditors repossess vehicles is to re-sell them in order to recover as much as they can of the outstanding balance on the loan.
If you have been missing payments on your auto loan and fear that a repossession may be in your future, one way to potentially stop it from happening is by filing for bankruptcy. When you file for bankruptcy, an automatic stay is put into place making it so your creditors cannot take collection actions against you.
While filing for bankruptcy may not be able to prevent your car from being repossessed indefinitely, it can buy you enough time to figure out a plan to bring your loan current so that repossession is no longer a concern.
Through filing for Chapter 13 bankruptcy, you may be able to lower your car payments by more than 50 percent to make sure that you are able to keep up with them so that you can keep your car.
Even if your car has already been repossessed, you may still be able to get it back. Under the law, your creditor must let you know if they decide to re-sell your car so that you can have the opportunity to buy it back.
Keep reading for more information on auto repossession and how our Milwaukee bankruptcy law firm may be able to help you save your car and turn around your financial situation.