Have you missed a few car payments? Have you received a notice of right to cure? You probably want to know – does bankruptcy stop vehicle repossession?
It is easy to get behind on car payments
Many car owners are financing vehicles they can barely afford due due to medical and credit card debt. They may also have a high interest rate loan due to poor credit. Or maybe their job does not pay enough. Whatever the reason, car loans make up a large portion of most peoples budget.
Does Bankruptcy stop vehicle repossession?
The short answer is yes. When a bankruptcy case is filed the Automatic Stay immediately goes into effect. This provision is found in Section 362 of the bankruptcy code. It protects all of your property, including your car.
Does the automatic stay apply to both chapter 13 and chapter 7?
Yes, the Automatic Stay goes into effect automatically for both types of bankruptcy. Consider Chapter 13 if you want to keep your car and you are behind on payments. Chapter 7 is a good option if you just need a breather until you can find another source of transportation.
They repossessed my car – is it too late?
You must move quick before the creditor sells the vehicle at auction. If you intend to keep the vehicle and file Chapter 13 prior to the auction, you can get the vehicle back. Most creditors take repossessed vehicles to a large holding lot for evaluation and reconditioning. This process can take a couple of weeks. You have time, but not a lot. Once the vehicle sells at auction it is too late.
I want to keep my car – what type of bankruptcy should I file?
You should file Chapter 13 Bankruptcy if you are behind on your car payment and facing repossession. The automatic stay goes into effect for both types of bankruptcy, but Chapter 13 gives you more options.
To Learn More About How a Chapter 13 Bankruptcy Can Stop Vehicle Repossession, Call Chris W. Steffens, a Kansas Licensed Bankruptcy Lawyer at 785-727-7700 for a FREE Consultation over the phone.