How Bankruptcy Stops a Auto Repo • ATL Law - Atlanta Bankruptcy Attorney
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How Bankruptcy Stops a Auto Repo
Filing for bankruptcy can help you in many ways, such as saving your car from a repossession. If you are behind on your car payments and are in danger of a repossession, than filing for bankruptcy will put in place something called an automatic stay which protects your vehicle from a creditor trying to make collection attempts towards you.
What If My Car Has Already Been Repossessed?
If your car has already been repossessed than you still have a good chance of getting it back, as long as you file for bankruptcy as soon as possible after the repossession, two weeks to be exact. If you file a chapter 7 bankruptcy during this time, your chances are not as high as they could be if you were to file a chapter 13 bankruptcy. This is because that a chapter 7 bankruptcy does not allow you to cure all of your loan arrears. It is still possible that you are able to work something out in bankruptcy court or with your lender, however, you are very likely to have to pay all of the repossession fees in return and average out your loan account in a very short amount of time.
If you file a chapter 13 bankruptcy during your auto repossession, than your chances of getting your vehicle back are much more likely. This is because it is designed to cure you of all your loan arrears and put you on a payment plan to pay off your car. Usually the lender will voluntarily return the car to you after filing a chapter 13 bankruptcy, but still charge you for the costs of repossession, which is usually a couple hundred dollars. However, in some cases the lender will be harder to work with and you will need a bankruptcy judge to order the car to be returned to you, which can take longer due to courts always being so busy. Once the car is returned to you, you will be put on a repayment plan for three years.