Getting behind on car payments can lead to the repossession of your vehicle by a creditor. Perhaps these late car payments are just the tip of even the greater financial stress and debt you are facing. As a result, you may consider filing for bankruptcy. One of the positive effects of choosing to file a Chapter 13 personal bankruptcy is that you may be able to save your car from repossession in the process.
Lawrenceville Chapter 13 Bankruptcy
Many times, when people think of bankruptcy they automatically think of a Chapter 7 bankruptcy, or a liquidation bankruptcy. In this type of bankruptcy, your assets are sold to get funds to payback your creditors. The remaining debts are then discharged. If, however, you want to keep your assets, you would file a Chapter 13 bankruptcy.
A Chapter 13 bankruptcy is instead a repayment plan. The plan consolidates your debts and allows it to be repaid over a 3-5 year period. After you have repaid your debts according to the payment plan, any remaining debt is discharged. In this type of plan, your assets are not sold—the plan and restructuring of debt allows you to keep your property while you make payments on the debt.
Saving Your Car With Bankruptcy
So how does a Chapter 13 bankruptcy save your car? Well, under Georgia law, when a car is repossessed by a creditor, the creditor must give you 10 days notice before they sell the car at auction to collect the deficiency balance for the car. What this means is that after your car is repossessed, you have 10 days to file your Chapter 13 bankruptcy.
If the creditor still has your car when you file for bankruptcy, they cannot auction it off and must return the car to you. You will then have to pay back your car debt as part of your repayment plan, but this gives you both time and, more importantly, access to your car as you do so.
Because the timing is crucial when using bankruptcy to save your car, you should contact a skilled Georgia bankruptcy attorney as soon as possible if you find yourself in this situation. It is also important to know that when you file a Chapter 13 bankruptcy an automatic stay goes into effect, which would stop any repossession of your vehicle before it happens. If you feel you may be in a place where you won’t be able to make your car payments, consider talking to a bankruptcy attorney before repossession occurs so you can avoid the stress of losing your car and fighting to get it back.
Financial troubles can often cause more problems than we anticipate, including losing your car. Because having access to a car is so important, a Chapter 13 bankruptcy can be a way to save your car after it is repossessed or prevent it from happening in the first place. A chapter 13 bankruptcy will then allow you time to make your payments as you follow a plan devised to help you toward a more stable financial future.
If you have questions about how a Chapter 13 Bankruptcy can help you save your car, contact the experienced bankruptcy attorneys at The Ballard Law Group. Remember, if your car has been repossessed, you will need to act quickly so contact us today at (404) 800-9939 to schedule your bankruptcy consultation.