Have you been trying hard for months to keep or get your car payments current, putting up with late fees and constant notices or phone calls from the creditor threatening repossession or a “repo” in Seattle? If your car lender is about to repossess your car or you are thinking about voluntarily surrendering the car to your lender to reduce your monthly payment obligation, STOP!
Many people must have a vehicle for work and/or other family obligations, and have no way to replace it. Being behind on your payments can leave you feeling stuck, with no good options. Before you give up your vehicle or let your vehicle be repossessed, talk to a lawyer in Seattle. Giving up your vehicle may or may not be the right decision for you, but you should understand the consequences of this decision.
Stopping the monthly car payments will not alleviate your financial problem. The car lender will sell your vehicle at auction and sue you for the deficiency balance on the car loan. Depending on the size of your car loan, a lawsuit may result in a wage garnishment which could force you into a bankruptcy and leave you without a car.
Depending on your situation, you may be able to keep the vehicle you thought you couldn’t afford by filing a Chapter 13 bankruptcy.
There are several reasons for this:
- The court will force your lender to accept smaller monthly vehicle loan payments.
- The Court may lower the interest on your loan under certain conditions.
You may be able to pay off the debt and own the vehicle free and clear for a lot less than the loan balance if the loan balance can be crammed down to the fair market value of the vehicle.
Chapter 7 may also be an option as it will create an automatic stay that immediately prevents further collection attempts on the auto loan. The automatic stay can give you the time you need to either get caught up on your payments or work with your lender to modify the loan through a reaffirmation agreement or a redemption loan. In some cases, you may be better off giving up the vehicle and pursuing a new car loan after a Chapter 7 discharge.
Having a reliable vehicle is often essential to achieving a successful restart of your financial life. Filing bankruptcy may help prevent you from having to surrender a vehicle or allow it to be repossessed. It could allow you to keep your vehicle and immediately reduce the amount you have to pay for it. Before you lose that essential part of your financial plan, come see me to find out your options.