Bankruptcy is the fastest way to stop any type of repossession effort. If you’re behind on your car you can stop a repo dead in its tracks in most cases. If you’re going to file a Chapter 7 you’ll likely need to be current for the Chapter 7 to work without a hitch. Once you are current, you can reaffirm that debt and keep making payments on the car. Chapter 7 eliminates other debts that may be keeping you from making your car payments to begin with.
The process of reaffirmation is an agreement between you and your lender on your car. It basically makes the bankruptcy as though it didn’t happen, at least in relation to your car. The lender gets you back on the hook for your car and you keep making payments just like before. The only difference is, you’ve gotten rid of all the things that were keeping you from being able to make your payments to begin with.
If you’re filing a Chapter 13, you don’t have to be current on your car. Chapter 13 is its own solution in and of itself. If you’re behind, the plan can be written so you can pay back the arrearage and keep making your payments. You get to keep the car and they get what they’re really after, their money. One thing you don’t want to do though is wait. If you know they’re looking for your car, you need to file NOW. It’s much easier (and cheaper) to keep your car and get the case filed than it is to go back and get it back after a repo. Once you know your car is in danger of being repossessed, you need to get in touch with us ASAP so we can stop it from ever happening.
One thing you need to remember is, you don’t have to be 3 months behind on your car for the lender to repo it. Under a lot of contracts, if you’re even a day late you have defaulted on the contract and they can begin the proceedings. You aren’t guaranteed anything outside the contract. Will they repossess on day 1, not likely. Ideally, they want you to pay, but that doesn’t mean they won’t come after the vehicle. Once you get notification of a pending repossession or you know you can’t make payments, you need to contact us. Remember, your rights begin to diminish with every moment you wait after you know you can’t pay anymore.