Last year I had some financial difficulties and I couldn't pay off my debt. The uncertainty of my financial future was adding to my already stressful life. After months of worry, I finally decided to contact a bankruptcy attorney. After discussing my options with the attorney, I decided to file bankruptcy. My name is Kyle Diggler and if you're struggling with debt and considering bankruptcy, I'm here to help you. I'm not an expert, but I want to share my story and my experience of filing bankruptcy with others who are in a similar situation. As you read my blog, you'll learn all about the bankruptcy process so that you'll know what to expect. I'll also share some tips to help you start your life over financially. I hope that my blog answers all the questions you have about filing bankruptcy.
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In 2012, the average U.S. household credit card debt reached an astounding average of $15,950. With the economy struggling, many Americans are having a hard time paying back their debts and reaching financial stability. If you've been falling behind on your car payments, your car may have been repossessed or may be in danger of getting repossessed by the dealership. You can get your car back or prevent the repossession by simply filing for bankruptcy under chapter 13. Here's how:
Preventing A Repossession By Filing For Bankruptcy
If your car is at the brink of getting repossessed due to the fact that you have been unable to make your car payments, then filing for bankruptcy may stop your car from getting repossessed. Once you have filed for bankruptcy, you are automatically entitled to an "automatic stay", which basically means that creditors are no longer able to request any payment or touch any of your assets until the bankruptcy application has been reviewed by the court. In short, the lender cannot repossess your car.
During this time, however, you are still responsible for having adequate insurance on your car, which includes having collision coverage, and you are still responsible for making "adequate protection" payments to the lender. The adequate protection payments are designed to compensate the lender for any depreciation that the vehicle may experience during the entire ordeal. Generally speaking, most of the time, the payments required for adequate protection will be close to the regular monthly payment plans that you were required to pay.
Getting Back A Repossessed Car
If your car has already been repossessed and you haven't waited too long before filing for bankruptcy under chapter 13, you may be able to get your repossessed car back from the lender; however, your bankruptcy trustee must arrange a payment plan for getting your car back. You will also have to prove that you still have the ability to make the monthly payments that you owe. Considering the fact that most lenders will prepare your car and sell it immediately in order to recover some of the debts that you owe, you will have to act quickly with your chapter 13 bankruptcy attorney.
The bankruptcy attorney will need to file a motion for turnover. Depending on who the lender is, a motion of turnover may not be needed; however, in these situations, your chapter 13 bankruptcy plan will need to include detailed information regarding how payments for the car will be made, and the amount of payments that will be made. Under chapter 13, your attorney may request for a "cram down", which is basically when you are responsible for paying the current market value on the car rather than what you owe. If your application for a cram down is approved, your interest rate on the loan will also be lowered.
What If You Are Unable To Make Payments?
In this situation, your attorney may advise you to let the car go instead. If you are willing to let the car go, the debt will be discharged along with the rest of your bankruptcy plan. Once you are discharged from chapter 13 bankruptcy, you still have the option of purchasing a car later on in the future. Unlike the common misconception, you are not barred from purchasing a car in the future; however, the lender might want proof of income or may require a higher down payment.
Conclusion
If you are at risk of getting your car repossessed or if your car is already repossessed and you are consider filing for bankruptcy, then you will want to speak with an attorney immediately in order to determine what your options are. Don't hold onto your vehicle if the reason is solely sentimental. Have an attorney like Brent Sorenson & Associates, P.C. perform the calculations for you in order to determine whether keeping your car is a feasible and practical option or not.
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