Chapter 13 Bankruptcy & Your Car
How Filing Chapter 13 Bankruptcy May Help You Stop Repossession of Your Car
Are you behind on your car payments? Does repossession seem imminent?
If so, Chapter13.Me is here to help you examine how Chapter 13 bankruptcy may allow you to keep your ride. The information we provide will be useful in understanding what you can and can’t do when seeking to save your car from repossession and take control of your situation.
Of course, speaking with a local bankruptcy lawyer is a good way to learn even more about car repossession in Chapter 13 bankruptcy. We can connect you with a nearby Chapter 13 bankruptcy lawyer in little time – all you have to do is fill out our free bankruptcy case evaluation form or call 1 (888) 632-0504, and we’ll do the rest.
How Chapter 13 May Save Your Car from Repossession
If you make the decision to file bankruptcy, an automatic stay will be entered by your bankruptcy trustee after your Chapter 13 bankruptcy lawyer files your bankruptcy petition. The automatic stay is essentially a court order that prohibits any further collection actions against you during your Chapter 13 case. This means that any attempts to repossess your car must stop during your case.
If you are interested in filing Chapter 13 bankruptcy to save your car, there are a couple of issues that you will need to address beforehand. First, determine the value of your car. Most states allow you to use bankruptcy code exemptions to protect your car. From here, you should choose between the federal and state exemptions. It is common practice to use the state exemptions.
As these exemptions vary from state to state, talking to a Chapter 13 bankruptcy lawyer will help you figure out your options and make addressing these issues much easier.
What If You Have a Car Loan?
If you have a car loan, the 910 day rule will come into play. Basically, if you purchased your car within 910 days of filing your Chapter 13 bankruptcy proceeding, you will have to repay the entire loan. You will need to pay the full balance of the loan due on the car, and not the blue book value.
If you purchased the car more than 910 days before you filed your bankruptcy petition, you are only responsible for paying an amount equal to the present value of the car. Numerically, this means that if you owed $10,000.00 on a car but it is only worth $5,000.00, you will only be required to pay the $5,000.00 in your repayment plan.
What If You Leased Your Car?
If you leased your car, you can assume the lease and continue to make the payments on the car, or you can reject the lease and have the car returned to the dealer. The dealer will then sell the car and the proceeds will be applied to your balance. The dealer can then file a claim for the remaining amount due on the lease.
The options you have in this category will depend on how much financial responsibility you can handle. If you have enough cash to continue to make payments on the lease, then it might be best for you to keep the car. If you feel that the payments will be too much for your budget, return the car to the dealer.
Discuss Your Car’s Situation with a Chapter 13 Bankruptcy Attorney Near You
Still have questions about your car and Chapter 13 bankruptcy? If so, there’s no need to worry.
At Chapter13.Me, we can help by connecting you with a bankruptcy attorney near you. All you have to do is complete our free bankruptcy case evaluation form or call 1 (888) 632-0504.
So take a few minutes to get started with our form – when your car may be in jeopardy, it’s better to act sooner rather than later. Let us do the initial work for you by connecting you with a nearby Chapter 13 bankruptcy lawyer as you get to work on keeping your wheels.