Will Chapter 7 Bankruptcy Prevent Car Repossession in Nevada?
Can Bankruptcy Protect You From a Vehicle Repossession?
Chapter 7 bankruptcy is perhaps the most popular form of bankruptcy because it offers the most debt relief. If you qualify for Chapter 7 bankruptcy, you will have the opportunity to have all of your unsecured debts discharged, such as credit cards, medical bills, and personal loans. Chapter 7 bankruptcy also includes many exemptions to allow you to keep some personal possessions, such as your home or your car.
It’s important to remember that the distinction for Chapter 7 bankruptcy is that it discharges unsecured debts. A car loan is not an unsecured debt, so it is not handled the same way in a Chapter 7 bankruptcy as other debts are.
Options for a Car Loan in a Chapter 7 Bankruptcy
A car loan is a secured loan, which means that if you default, the lender has the right to repossess the vehicle and sell it to try to get the amount you owe. If you were to discharge a car loan in a Chapter 7 bankruptcy, you wouldn’t just be getting rid of the loan – you’d also be getting rid of the vehicle.
Of course, you can decide to do just that, but if you want to keep your vehicle, you will need to explore some other options. If you have the money to do so, you can pay what you owe and become current on the loan. But, since you’re considering filing for bankruptcy, chances are good that you don’t have the money you owe. In that case, you can ask the lender to give you some time to become current. You may explain that you plan to file for Chapter 7 bankruptcy, and that will relieve some debt, clearing up the money to pay your auto lender.
Filing for bankruptcy implements an automatic stay, which puts a stop to any legal action being taken against you. The automatic stay can give you some time to negotiate repayment with your lender if you would like to keep your vehicle.
Chapter 13 Bankruptcy
Chapter 7 bankruptcy is not your only option for debt relief. If you are facing repossession of your vehicle, but you want to keep your vehicle, you should talk to a bankruptcy attorney about how filing for Chapter 13 bankruptcy can help you.
Under Chapter 13 bankruptcy protection, all your debts are reorganized into an affordable payment plan that is based on your income. You make one monthly payment to the bankruptcy court, and that money is distributed to your creditors according to the plan. The payment is typically going to be less than what you currently pay, and it will not include all the interest you would have paid.
The amount you owe on your vehicle can be included in your Chapter 13 repayment plan, and that can put a stop to your vehicle’s repossession. You will have to continue making your regular car payments in addition to your bankruptcy plan payments. Otherwise, you can fall behind again, and your lender may be able to initiate repossession.
Talk with a bankruptcy attorney if you are struggling with debt and are now facing legal action, such as the repossession of your vehicle or the foreclosure of your home. Filing for bankruptcy may be able to help you get needed debt relief, either through the total discharge of your unsecured debts or the restructuring of your debt. With the right strategy, you can also use bankruptcy to stave off legal action, such as repossession or foreclosure.
Call Zero Down Bankruptcy Lawyers of Reno today to learn more about your options for debt relief through bankruptcy. We represent individuals in Chapter 7 bankruptcy and Chapter 13 bankruptcy. An experienced bankruptcy attorney from our team will talk with you about your goals and review your finances to help you understand the best bankruptcy option for you. We are committed to helping you get the maximum debt relief possible and getting the fresh financial start you need. We do not require any money down to file for bankruptcy, and we accept easy payment installments. Call us in Reno today to schedule a consultation with a bankruptcy lawyer and learn more about your options.
Zero Down Bankruptcy Lawyers Of Reno