Foreclosures & Reposessions
Outside of bankruptcy, there is only one way to stop the lender from repossessing your vehicle – catching up on the delinquent payments. But that may not be possible. In bankruptcy, there are multiple options to keep your vehicle. If you just need a bit of breathing room to catch up on your payments, filing a Chapter 7 bankruptcy will stop the lender from repossessing your vehicle for a couple of months, during which time you can catch up on your payments. Chapter 7 debtors who have the option of getting new financing to purchase their car at the current fair market value and discharging their old vehicle loan.
If you bought your vehicle at least 910 days before your bankruptcy case is filed, a Chapter 13 case will let you “cramdown” your vehicle loan to the current fair market value of your vehicle. If you are underwater on your vehicle loan, that can save thousands of dollars. Chapter 13 debtors with high-interest vehicle loans can also reduce the interest to a more reasonable rate. Again, this can save significant money over the life of the loan. Even if your vehicle has just been repossessed, we might be able to get it back for you with a Chapter 13 case filed on an emergency basis.
Foreclosure: A Chapter 13 case can also save your home from foreclosure. If you are behind on your mortgage payments, a Chapter 13 case can let you pay off the arrears over the life of the Chapter 13 plan (36 to 60 months). In some cases, Chapter 13 debtors can eliminate a second mortgage. Chapter 13 could also give you time to sell your house, saving the equity for yourself rather than losing it in a foreclosure.