Filing for bankruptcy can be a scary process for most people because it’s not something you do on an everyday basis. A majority of people are completely unaware of how the process works let alone the specific laws that will apply to their unique situation. In nearly all cases in which a skilled attorney has not been obtained, individuals oftentimes are left feeling frustrated and asking a lot of questions.
One question regularly asked by a majority of Wisconsinites in this position is: can a lender repossess my car if I file for Chapter 7? Unfortunately, the answer is both yes and no, depending on your situation. Let’s take a look.
The first thing that our Milwaukee readers need to know if that, depending on the terms of your contract, a creditor is permitted to repossess a vehicle when a debtor defaults on their loan or lease. Only the specific terms of your contract though will tell you when this may occur and what rights you have to stop it from happening.
It’s important to point out though that if you file for bankruptcy, such as Chapter 7, an automatic stay is placed on certain property in your possession. This stay prevents most collections from occurring, such as the repossession of a vehicle.
It’s important to note, however, that even though bankruptcy filings are controlled by federal law, certain state laws do apply in some situations. An individual from Wisconsin or any other state might not know these laws though or when they apply, which may lead to misunderstandings that could lead to mistakes. By hiring a bankruptcy attorney though, Wisconsinites can avoid this problem by getting the advice they need to protect their rights and property when dissolving debt.
Sources: The United States Courts, “Chapter 7 – Bankruptcy Basics,” Accessed Aug. 5, 2015
The Federal Trade Commission, “Consumer Information, Vehicle Repossession,” Accessed Aug. 5, 2015