How to Stop Auto Repossession by Filing Chapter 7
When you fall behind on your car payments, the lender has the option of repossessing it. Your car will be sold at an auction and you could be responsible for the remaining balance. A repossession can be damaging to your credit file. This information remains on your file for seven years. If your car is in the process of being repossessed, you can stop the process by contacting the lender with adequate payment arrangements. Another way to stop repossession is by filing a Chapter 7 bankruptcy.
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Instructions
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Contact a bankruptcy attorney and start the process for Chapter 7 bankruptcy. Make sure you have a list of all assets and liabilities. Your attorney will need this information. When your bankruptcy has been filed, you will be assigned a case number, which shows that your case has been filed in the court documents.
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Contact your creditors. Once the bankruptcy has been filed, all of your creditors will be notified by the court that you have filed a petition for bankruptcy. An automatic stay will be issued by the court. An automatic stay will prohibit all creditors from proceeding with collection activities, including phone calls, written correspondence, legal action, repossession and other communications for the purpose of collecting a debt. You can expedite the process by calling the bank or lending institution that provided financing for your car and let the lender know you are in bankruptcy proceedings.
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Give your auto lender all information concerning your bankruptcy. The lender will need the name and address of your attorney, as well as the phone number. Give the lender the case number and the date that you filed for bankruptcy. If the lender has an order out to repossess your car, the firm will contact the repossession company and cancel the process. Your automobile will be safe from repossession for the time being.
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Determine how you will handle the car loan. When a bankruptcy has been filed, you still have some decisions to make. A bankruptcy does not wipe away the lien that has been placed on your vehicle. If you owe money, you can turn the car over to the lender, who sell it and apply the proceeds to the loan balance. There is an option that allows you to keep your car. You will need to work out new terms and agreements with the lender. If you sign a reaffirmation agreement, you will be able to keep your car as long as you continue to make payments. A reaffirmation agreement reactivates the terms and conditions of the loan.
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