Many people value personal vehicles critically. They are necessary to meet our day-to-day transportation needs and are often one of our most valuable assets. Because of this, it can be jarring and often a bit scary when a lender tells you they plan to repossess your car. One of the first things you might ask yourself if you are experiencing this is, “How do I stop the repossession process and protect my car?” The good news is that bankruptcy can be a resource to help you do this!
When you file a bankruptcy, you become protected by the “automatic stay” while the bankruptcy is still pending. The automatic stay protects you from a variety of things related to the collection of debts and repossession of assets, and in a situation where a lender is threatening to repossess your car, it can stop them, at least temporarily, from going through with that process. For a lender to restart the repossession process while the bankruptcy is still pending, they would have to ask the bankruptcy court for permission to do so through a “relief from the stay”. However, you can prevent them from doing this by agreeing to catch up on the back payments for the vehicle through bankruptcy.
How is this accomplished? One way is through filing a Ch. 13 bankruptcy, which allows you to catch up on the back balance of the car loan by paying it back in increments throughout your bankruptcy. Your attorney will advise you on how the process can be specifically tailored to help you with your circumstances and can help you put together a plan that will account for your financial needs and work with your budget.
Often, a lender may be unwilling to work with you to catch up on your car loan if you have fallen behind. They may demand that you pay back the entire balance at once, or they could require you to make a series of large, sometimes unmanageable payments in a very short period to halt or delay the repossession process. However, by leveraging the resources available through bankruptcy, you can regain control of this process from the lender and protect your vehicle on terms that work for you and your budget.
Call Now For A Free Strategy Session With A MN Bankruptcy Lawyer
If you been contacted about an upcoming repossession for your vehicle, or if you are struggling with a back balance on car loan and wondering how to resolve it, please feel free to give us a call! When the time is right, or when you are ready, please don’t hesitate to reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com.
