How bankruptcy can stop your vehicle from being repossessed
This can be a very difficult time of the year for many families. Some may be having trouble paying their bills, and still they want to be able to make sure that their families have an enjoyable holiday season. They spend more money than they have, and suddenly they find themselves facing serious debt problems.
These individuals need to be very careful about how they approach their financial situation. Certain creditors will be more aggressive than others, and there may be serious consequences if people fall behind on these payments. For example, if individuals are not making their car payments in a timely manner, the lenders may repossess the automobiles, which can make a difficult financial position much worse.
If a vehicle is repossessed, the lenders may sell the car and use the money to pay off the balance of the loan. If extra funds are still owed, they may pursue the debtors for the outstanding amounts. This means the individuals may still be making payments on a car that they can no longer operate.
There are things that debtors can do if they find themselves in this particular situation. They can work with their lenders to try to find a more manageable payment schedule, or other type of loan modification. Others may try to sell the vehicle to pay off the loan that they have, but this will leave them needing to find a new manner of transportation.
Some are afraid to consider all of the options that they have, especially when it comes to filing for bankruptcy. They fear they will lose their property, or ruin their credit for the rest of their lives. This is not true – and by failing to consider the advantages of bankruptcy, debtors may be causing themselves serious harm.
Under Chapter 13 bankruptcy, any collections or repossession actions against a debtor must stop while the process is ongoing. This allows the individuals an opportunity to design a plan that allows them to meet their financial obligations, including car payments. Individuals will be able to keep certain property, including vehicles, which is extremely important for most families.
Many people who experience problems with their finances have no idea what they can do to protect themselves at this time. They simply try to stay one step ahead of their creditors for as long as possible. They might be able to keep going for a while, but eventually, they will fall too far behind on bills and may be subject to repossessions, foreclosures and other collections actions.
Do not let this happen to you. You should contact an experienced bankruptcy attorney as soon as you begin having trouble making ends meet. An attorney experienced with filing bankruptcy petitions can analyze your specific situation, and help you develop a plan that meets your needs.