As you contemplate filing for bankruptcy, you'll soon find that you have many questions. Like most, you may be concerned about losing your home and car.
Here is something to remember: Bankruptcy is designed to provide you with debt relief while protecting some of your assets. For this reason, just because you file for bankruptcy it doesn't necessarily mean you will lose your car.
In Chapter 7, for example, many assets, including cars, can be protected from liquidation.
With Chapter 13 bankruptcy, you're in position to reorganize your debt as a means of catching up on missed payments. So, once again, you can keep your car.
When you sign a car loan agreement, it's safe to assume that there is language that outlines what will happen if you miss one or more payment. In this case, the lender has the right to repossess your car.
However, you can stop the repossession process by filing for bankruptcy. With this approach, an automatic stay goes into effect. This prohibits the lender from taking any collection activity in the meantime.
At our law firm, we have helped many people navigate the many challenges associated with Chapter 7 and Chapter 13 bankruptcy. This includes the fear of losing their car, as well as many other assets.
Don't shy away from bankruptcy because you believe your car will be taken from you. With the right approach, you can keep your car, along with other assets, while also improving your financial situation. Once everything is said and done, you'll feel much better about your ability to enjoy your life in the future.