Does Filing For Chapter 7 Bankruptcy Prevent Car Repossession?

Does Filing For Chapter 7 Bankruptcy Prevent Car Repossession?

Filing Chapter 7 Bankruptcy To Avoid Vehicle Repossession In Arizona

Most people are drawn to Chapter 7 bankruptcy when seeking debt relief because it allows them to completely discharge unsecured debts, such as credit cards, medical bills, personal loans, and more. However, when people want to keep their possessions – such as their vehicle or their home – they have questions about whether Chapter 7 is right for them. Others may already be facing repossession of a vehicle or foreclosure on a home and wonder whether Chapter 7 bankruptcy can put a stop to that.

It’s important to talk to an experienced bankruptcy attorney in Gilbert about the specifics of your finances and your goals to get concrete answers. There are many caveats and exceptions for bankruptcy law, and your attorney can help you understand the more nuanced aspects of the law. However, here are a few things you can consider:

Filing Chapter 7 Bankruptcy To Avoid Vehicle Repossession In Gilbert, AZ

Deciding on Your Goals Based On The Car Loan

Chapter 7 bankruptcy will not put a stop to your car being repossessed. A car loan is a secure loan, which means that if you do not make the payments, the lender has the right to seize the vehicle to satisfy the debt. The only way to stop the car from being repossessed is to pay what you owe. But if you are considering bankruptcy, chances are good that you don’t have the money to pay.

You need to think about what you really want. If you want to keep the car, you can reaffirm the debt and agree to keep paying it. Then the bankruptcy will discharge your other debts, which can free up the money you need to pay what you owe on the car. You’ll just need to talk with your lender about giving you the extra time to come up with that money before the repossession is executed.

You can also file Chapter 7 and decide to surrender the vehicle. Then, not only will your other debts be discharged, but so will your car loan. The car will be repossessed, but you also won’t owe on that debt anymore.

Consider Chapter 13 Bankruptcy

If you want to keep your vehicle and your lender isn’t willing to give you any more time or you do not qualify for Chapter 7 bankruptcy, you should consider Chapter 13 bankruptcy. Under this chapter of bankruptcy, your debts are consolidated under a single repayment plan. Instead of paying multiple creditors each month, you make one payment to the bankruptcy trustee, and that is distributed to your creditors. Your monthly payment is determined based on your ability to pay, and the plan continues for three to five years. At the end of that time, some of your debt may be able to be discharged.

Any payments you have missed on your car can be rolled into your Chapter 13 bankruptcy repayment plan. You may be able to catch up on what you owe over time, while saving your vehicle from being repossessed. Again, it’s a matter of whether you really want to keep the vehicle and it’s worth it to you to catch up on those payments.

Bankruptcy can be a great tool for getting the debt relief you need, but some of the financial circumstances you are dealing with may not be so clear-cut, such as trying to continue financing a vehicle that you cannot afford to let go. It’s important to consult with an experienced bankruptcy attorney so you can review your options more in-depth and understand how bankruptcy law will influence your particular circumstances. Your attorney may recommend a combination of options to help you get the desired outcome.

Hire Professional Bankruptcy Attorneys In Gilbert, AZ

Call Gilbert Bankruptcy Lawyers today to learn more about your options for debt relief through bankruptcy protection. Our bankruptcy attorneys represent clients interested in both Chapter 7 bankruptcy and Chapter 13 bankruptcy. We can help you put an end to harassing phone calls, wage garnishment, and possibly even repossession or foreclosure. We offer affordable fees, and you can file for bankruptcy with zero money down. We can offer same-day appointments in most cases, and we have flexible scheduling and convenient locations. Call us today to schedule a consultation with a bankruptcy attorney and learn more about your options for debt relief.

Gilbert Bankruptcy Lawyers
Office: 480-448-9800