Chapter 13 Bankruptcy Can Stop Repossession
If you are in danger of having your car repossessed by creditors in Virginia, you might be wondering whether you have any means of stopping the action. If preventing repossession is your goal, Chapter 13 bankruptcy may be the best strategy available.
When you file for Chapter 13 bankruptcy, the court issues an automatic stay that prohibits your creditors from attempting to collect payments on the debt. This applies to most types of debts and creditors, but it will not stop collections for criminal restitution, child support and some eviction proceedings.
The following are two situations in which the automatic stay will protect you from repossession:
1) You had the car when you filed for bankruptcy
If the lender did not already repossess your vehicle when you filed for bankruptcy, the automatic stay will prevent any repossession attempts until the judge approves your repayment plan. Assuming that plan covers any missed car loan payments, your lender will not be able to proceed with repossession efforts during or after your bankruptcy.
It’s still sensible to keep making your vehicle payments — if you can — until the court confirms your plan, just to be on the safe side.
2) The lender began repossession efforts before you filed
If the lender repossesses your vehicle just before you file for Chapter 13 bankruptcy, you might still be able to take back your car. To do so, you’ll need to have a repayment plan that includes paying back missed payments while also continuing to make monthly payments moving forward. You’ll need the assistance of a skilled attorney to make this happen.
For further guidance on how Chapter 13 bankruptcy works in Virginia and how to develop a repayment plan that protects you from repossession, consult a dedicated Charlottesville bankruptcy lawyer with Miller Law Group, P.C. Contact the firm online or by calling 434-202-5293 today.