Filing for bankruptcy may stop repossessions, depending on the kind of bankruptcy you file and how fair into possessions you are. If your creditor has been threatening you with repossession and you don’t want to lose your property, consult a Charleston, WV bankruptcy lawyer right away. Your attorney can assess your situation and help you decide the kind of bankruptcy you can file to save your property.
When a Lender can Repossess Your Property
Once you fall behind your debt payments, you have defaulted on your debt. When in default, your lender can repossess your property, which means they can take it from you, sell it at auction and use the funds to recover some of their losses.
If you have a car loan and your car is repossessed, this does not mean you no longer owe on that loan. Your lender can still hold you accountable for any fees and the remaining balance after they sell your car and use the proceeds to pay the balance.
When Repossessions can be Stopped
Filing for bankruptcy gets you an automatic stay. The automatic stay requires your creditors to stop collection activities against you. Thus, they cannot contact you for payments, harass you, repossess your property, file lines, or foreclose your home. Since an automatic stay is the only way to stop repossessions, you need to file as soon as possible.
Chapter 13 Bankruptcy and Repossessions
Under Chapter 13, you propose a repayment plan to the court. When the court approves the proposal, you will make these payments in the exact amount and on the schedule specified on the plan. If you want to keep your car, you can include paying any outstanding payments on your car in the plan. Chapter 13 will prevent repossessions if you get the automatic stay before your lender can repossess your car. But, you can still get your car back even if it has been repossessed. This is only possible if your lender has not sold the car.
Chapter 7 and Repossessions
When you file for Chapter 7 bankruptcy, you still get an automatic stay. But, without a court-approved repayment plan, you should look for a way to get current on your car loan to keep the vehicle.
If you are facing repossession but want to keep your property, you should speak with a lawyer immediately. By filing for bankruptcy, you unlock the protection of automatic stay and keep your vehicle from being repossessed by creditors.