Bankruptcy After a Car Repossession: Can You Get the Vehicle Back?
Are you wondering about getting a car back after repossession? Often, a car repossession is just the tip of the financial iceberg. If you are behind on your car payments, you may also struggle with other unmanageable debts. A bankruptcy lawyer can help you explore options for managing your debt and getting your car back. Contact us to discuss various ways to get a repossessed car back.
How to Get a Repossessed Car Back After Bankruptcy
You have a few options for getting a repossessed car back after bankruptcy, including the following:
- File Chapter 13 and provide for the vehicle loan as part of the Chapter 13 case. This is the most common approach that is taken to the undesired repossession situation. The vehicle loan is paid through Chapter 13 trustee disbursements. The vehicle can generally, but not always, be recovered within 1-2 business days. The debtor will have to travel to the location where the vehicle is being stored. The debtor will need to have insurance on the property and the lienholder will need to be listed as the loss payee.
- Reaffirming the loan in Chapter 7 — If you can discharge or pay down more significant debts, you may be able to afford your car loan payments moving forward. You would reaffirm the loan with the bank and begin payments. A reaffirmation agreement is not something that can be compelled but is rather voluntary.
- Redeeming the vehicle in Chapter 7 — You may be able to redeem the vehicle, where you pay the value of the vehicle in a lump sum to the finance company in exchange for the release of the lien.
What Is an Automatic Stay, and What Does It Have to Do with Repossession?
When you file for bankruptcy, the court issues an automatic stay. This stay prevents the lender from taking action to repossess your car while you are in bankruptcy proceedings. If you file for Chapter 13 bankruptcy, you will work on a repayment plan to manage your debts — including your car loan. After filing for Chapter 7 bankruptcy, you will discharge debt and sometimes be subjected to the liquidation of assets. The automatic stay prevents the finance company from selling the vehicle if it has been repossessed prior to the case filing.
Need More Information? Contact Our North Carolina Bankruptcy Law Firm
Want to know more about North Carolina car repossession laws? Then contact Sasser Law Firm today. Our attorneys can help you understand your legal options and how to get a repossessed car back. We are not afraid to take on cases where a vehicle has been repossessed pre-bankruptcy and appreciate the importance of acting quickly. Reach out to our North Carolina bankruptcy law firm today for a free consultation.
This post was originally published on January 2014 and has been updated for accuracy and comprehensiveness on December 2022.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.