Stopping Auto Repossession With Chapter 7 or Chapter 13 Bankruptcy
Upon filing for Bankruptcy, under either Chapter 7 or Chapter 13, creditors are prohibited from repossessing your vehicle without Bankruptcy Court permission. Under Chapter 13 where a plan to cure past due payments are proposed, the Court will generally not give the creditor permission to repossess the vehicle. However, in a Chapter 7, the Court will generally give creditors permission to repossess the automobile if the payment is not current.
Chapter 13 — Reducing the Balance Owed on Your Vehicle
If you financed your vehicle, the chances are that you are upside down on it, that is you owe more than it is worth. Chapter 13 Bankruptcy may allow you to pay the fair market value of your vehicle regardless of how much is owed. If you purchased your vehicle over 910 days prior to filing for Chapter 13, this option may save you thousands of dollars.
We may also cure any past due payments on your vehicle. Under Chapter 13, we will propose a plan to repay any past due payments over the course of 3 to 5 years.