If you are someone who is already struggling with money troubles, fearing you may lose your car is certainly frustrating. Not only could losing your car mean that it will be even harder to get to work, but losing your car could even result in a deficiency judgment against you, meaning you will still owe money to the creditor for the car.
In these types of situations though, do not lose hope. Rather, realize that help may be available to you. At Miller & Miller Law, LLC, we help people avoid auto repossessions. In cases where the car has already been taken, we make sure the rights of the borrower are protected.
The best way to avoid losing your car is to avoid missing payments. For someone who is already struggling with bills and has debt accumulating, realizing you will not be able to make payments may also be the right time to put a stop to it all by filing for bankruptcy. The simple act of filing for bankruptcy will put an automatic stay in place. This will stop creditors from undertaking collections, meaning the creditor will not be able to repossess the vehicle.
With a Chapter 13 bankruptcy, there is a good chance that car loan payments can be included in a repayment plan. With this, there is also the chance that the auto loan payment amount will actually be reduced.
It is true that a person who files for Chapter 13, as opposed to Chapter 7, has a better chance of being able to keep their car. However, with both types of bankruptcy, an automatic stay will be put in place. For some, this is a welcomed delay to repossession.
As we mentioned earlier too, in cases where a vehicle is repossessed, keep in mind that borrowers have rights. If the creditor violated these rights, let’s say by selling the vehicle without notifying the owner, there may be legal action that can be taken against the creditor to either sue for damages, or avoid a deficiency judgment.