How Bankruptcy Can Help You Recover a Repossessed Vehicle

 Posted on December 00, 0000 in Bankruptcy

Getting behind on your bills due to unforeseen life events takes a toll on both your credit score and your emotional well-being. When your vehicle becomes repossessed, it may feel like the world has collapsed around you. How are you going to get to work? If you have no reliable transportation, how will you keep your job to pay bills and put food on the table? As contradictory as it may seem, filing for bankruptcy can help.

Get Your Vehicle Back

Many lenders do not give any advanced notification of an upcoming repossession. If you are behind on your payments, filing for bankruptcy can prevent the lender from taking your vehicle without warning. When you file for bankruptcy, an automatic stay is placed on all of your bills, preventing lenders and creditors from pursuing any collection actions, including repossessions and harassing phone calls. It may be possible to reclaim a repossessed vehicle, so long as it has not already been sold. Typically, lenders successfully sell these vehicles in under two weeks, depending on a variety of factors, so it is important to move quickly after a repossession.

Getting a vehicle back depends on the type of bankruptcy filed. The differences are as follows:

• Chapter 7 bankruptcy buys you some time to pay the missed payments due to the automatic stay. Your payments would then continue with the original loan terms. If you cannot pay back the full arrears, the automatic stay affords you time to negotiate with your bank on various payment options. One last option that may be available is to reclaim the car and own it free and clear by paying the bank what the car is worth, rather than the amount owed on the vehicle. This amount must be agreed upon with the lender and settled in a lump sum.
• Chapter 13 bankruptcy rearranges your loan terms and can force the lender to return the vehicle to your possession, but you may be responsible for the repossession fees. The renegotiated payment plan will spread the payments out over three to five years.

Contact a Kane County Bankruptcy Attorney

Many people shy away from filing for bankruptcy due to a perceived social stigma and the long-term impact on their credit score. Instead, consider a life where your phone is not constantly ringing as creditors attempt to collect payment from you. Also, keep in mind that a repossession and missed payments will also negatively impact your credit score. If you are exploring the possibility of bankruptcy, a Kane County bankruptcy lawyer can help. Thomas Law Office can help you eliminate or reduce your debt and pursue all options of getting your vehicle back, allowing you to get back to a normal life. Call 847-426-7990 today to schedule your initial consultation.

Sources:

http://www.cyberdriveillinois.com/publications/pdf_publications/vsd608.pdf http://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=062500050K3-114 http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics