Are you in arrears with your car loan payments? Are you worried that your lender is going to take your car away? If yes, you might be thinking about approaching a Bankruptcy Attorney to stop your vehicle from being taken.
Chapter 7 may temporarily delay the Lender from retaking Your Car
If you’re behind on your car loan payments and are in debt, making a Chapter 7 bankruptcy cannot prevent the repossession of your vehicle forever. But, Chapter 7 can create an indefinite delay, which gives the opportunity to move to find a permanent solution.
Chapter 7 and The Automatic Stay
Automatic stays are granted at the time of the filing of Chapter 7 bankruptcy. The automatic stay is crucial to those who face a repossession of their vehicle since the automatic stay stops creditors from pursuing their collection efforts. The lenders are not allowed to take any action that seeks to pay the debts incurred by the bankruptcy, which includes repossession. In order to continue the process of repossession the auto lender must obtain the approval of the court first. However this Chapter bankruptcy procedure is typically swift (most Chapter 7 bankruptcies take just a few months). After the bankruptcy case is completed the automatic stay will no longer in force and the lender would be free to act.
What is the reason why the Court would grant the Lender Permission to Repose during the Chapter 7 bankruptcy process?
In certain situations, Chapter 7 bankruptcy’s automatic stay won’t be able stop repossession of the car for the entire bankruptcy. The lender might be able to ask the court for permission to take possession of the vehicle in bankruptcy by filing motions in order to lift an automatic stay. In the majority of cases the judge will allow this request only if the person filing is able to prove they are making payments and trying to catch up with past payment obligations.
What You Can Do to avoid car Repossession After Chapter 7 Bankruptcy Is closed:
The filing of a Chapter 7 bankruptcy can give you opportunity to negotiate loan terms with your lender. This could enable you to avoid repossession while keeping your vehicle. If a borrower is bankruptcy, the lending institution will know that bankruptcy discharges wipe off the personal responsibility to the lender. Although it doesn’t erase the obligation of lenders, it can restrict the options available to them. When a bankruptcy discharge has been granted, repossession is the only option left for the lender. This usually provides lenders with the opportunity to negotiate new terms for loans (especially in the event that you owe more to the vehicle than the value). Think about negotiating a lower amount or a lower interest rate. It may be necessary to renew the loan if successful in the negotiation.
Chapter 7’s automatic stay permits you to make your loan up to date and “cure your default.” If you’re able to keep the loan up to date the lender has no any reason to repossess it and would rather to keep it and make payments, as they earn more money in this manner.
The filing of Chapter 7 bankruptcy allows you to erase the lien by repurchasing the vehicle. The purchase of the vehicle at the fair market value from the lender could eliminate the lien of the lender. The process of redeeming a car could mean saving money, especially when the car’s value is less than the amount of loan. But redemption is only feasible when the bankruptcy filing person is able to pay a lump sum to the lender and a motion needs to be filed in order to get the permission of the bankruptcy court.
Local Attorneys 360 in the city of proudly stands as the best Bankruptcy Law Firm in the city. We have the best team of lawyers and law experts who deal with any sort of bankruptcy case and Tax Legal Matters. We understand all your worries and provide you with effec tive legal advice. We also work at the most affordable rates you can find .