Stop Car Repossessions with Bankruptcy
Having your vehicle repossessed is undoubtedly a terrifying and distressing experience for anyone. After all, how will you get to work if you lose your vehicle? What will you do to support your family? What impact will a repossession have on your credit and, as a result, your financial future?
If your vehicle has been repossessed due to late payments, you may be wondering if filing for bankruptcy will allow you to get your car back. In most circumstances, the answer is yes – bankruptcy may be able to help you get your vehicle back. The goal is to act as soon as possible and to know exactly what measures you need to take to accomplish this. To put it another way, the timing and type of bankruptcy you file will make a huge difference.
When your car is being repossessed, you should call an expert Oklahoma bankruptcy lawyer who can help you get the best possible outcome. The Oklahoma bankruptcy attorneys at Hilbern Law can assist you if you have already lost your vehicle to a lender and are attempting to reclaim it, or if you are considering filing for bankruptcy to keep your vehicle.
Does Timing Matter?
Regardless of which type of bankruptcy you decide to file, the court grants an “automatic stay” prohibiting creditors from participating in collection actions the instant you file. This includes any attempts to repossess a vehicle; your bankruptcy filing shields you totally, and lenders must obtain court authorization before attempting to collect from you.
If you want to keep your vehicle after falling behind on your loan payments, apply for bankruptcy as soon as possible. The longer you wait, the higher the chances of your car being repossessed.
If your vehicle has already been repossessed, you may have a limited window of opportunity to get it back. After repossessing a vehicle, a lender will usually keep it for a few weeks before selling it at auction.
The automatic stay will, however, put a stop to the sale of your vehicle, giving you time to have it returned. Again, acting as quickly as possible is critical for the greatest possible outcome.
Types of Bankruptcy
If you are in default on your loan, filing for bankruptcy may help you keep your automobile or get it back after it has been repossessed. Whether you file for Chapter 7 or Chapter 13 bankruptcy, however, has an impact on the outcome.
How Can Chapter 13 Bankruptcy Help Me?
A Chapter 13 bankruptcy is your best bet for getting your car back or avoiding having it repossessed in the first place. If you contemplating filing for Chapter 13 bankruptcy before your vehicle is repossessed, you may be able to keep your car if you act swiftly. In a Chapter 13 bankruptcy, you can make up past-due payments, or arrears, over three to five years during your repayment plan.
How Can Chapter 7 Bankruptcy Help Me?
Chapter 7 bankruptcy is not the greatest option if you want your car back after it has been repossessed by a lender. Because Chapter 7 bankruptcy prevents you from repaying your debt, a lender may be less willing to return your automobile. While you may be able to work out a deal with the lender, they will almost certainly expect you to pay all repossession costs as well as the full amount owed on the loan within a short period.
What if your car was repossessed by a lender before you filed for bankruptcy? You may be able to reclaim your vehicle by submitting a claim, but you must act promptly. You will not be able to get the car back if the lender sells it at auction or to a third party. Although the duration between repossession and sale varies by state, it is usually only a couple of weeks.
Because the car is deemed part of the bankruptcy estate, and repossession is considered an illegal preference, if you have nonexempt equity in the vehicle, the lender is required by law to surrender it to you. In other words, by getting payment, or in this example, the vehicle, within 90 days of your filing, the lender was “preferred.” The bankruptcy trustee, not the lenders, decides who gets paid. Keep in mind that most car lenders will refuse to release the vehicle without a court order, so you’ll need the assistance of an Oklahoma bankruptcy attorney. However, if you want to keep possession of the automobile, you’ll have to do one of two things:
- Either reaffirm the obligation with the lender by agreeing to new payment arrangements, or
- Redeem the property by making a one-time payment to the lender to reclaim the car.
Contact an Oklahoma Bankruptcy Lawyer Today
If you are currently trying to get your property back or are considering filing for bankruptcy to keep your car and are unsure where to turn, contact the experienced bankruptcy lawyers at Hilbern Law now for help. In Oklahoma City and the surrounding towns, we handle both Chapter 7 and Chapter 13 bankruptcy cases. We can talk about your case, go over your options, and recommend the one that we believe will result in the best possible outcome. Call (405) 213-1919 today to learn more about our Oklahoma bankruptcy law company or to schedule a consultation.
You have nothing to lose but your debt.