Should I File For Bankruptcy Before My Car Is Repossessed?
For many people struggling with their finances, the threat of losing a vehicle through repossession may be the final straw that drives them to discuss their case with a bankruptcy attorney.
Vehicles that are repossessed without a bankruptcy being filed, typically result in the vehicle being sold, and the lender then continuing to try to collect against the former owner for the “deficiency” which is the amount owed after providing credit for the amount that the vehicle sold for. Because of the tacked on attorneys fees and repossession fees, in many cases the amount owed is close to what was owed before the vehicle was repossessed.
Bankruptcy can help. By filing bankruptcy, whether before or after the vehicle is repossessed or voluntarily turned back over to the lender, this deficiency or potential remaining debt on the vehicle can be included in the bankruptcy and discharged (eliminated) along with the other debts that a person may have.
An advantage of filing for bankruptcy before the repossession is that doing so will slow down the repossession until the creditor receives permission from the Court to pursue the repossession. Generally, repossessions after filing bankruptcy are coordinated and scheduled ahead of time rather than having your vehicle just disappear when you least expect it.
If you are struggling with debt, and you are concerned about possibly having a vehicle repossessed, please call us for a free bankruptcy consultation.