Another reason to use Chapter 13 is to stop repossessions and to get your car back. If your automobile is behind and you would like to continue making payments, Chapter 13 may be the best solution for you. Many times a Chapter 13 case can even cause your payment(s) to be lowered.
THE REASON WHY CHAPTER 13 STOPS REPOSSESSIONS IS BECAUSE OF THE “AUTOMATIC STAY” WHICH STOPS ALL COLLECTION
After your Chapter 13 is filed, the “automatic stay” will protect you from a further collection activity. This stay instantly stops all repossessions. If your vehicle was taken after the bankruptcy case was filed, your automobile creditor will be required to return the vehicle to you right away. No repossessions will be tolerated by the bankruptcy court if they somehow occurred after the Chapter 13’s “automatic stay” goes into effect.
CHAPTER 13 CAN GET YOUR CAR BACK AFTER IT IS REPOSSESSED
Within the options of bankruptcy, only Chapter 13 (not Chapter 7) can help you get your car back after it is repossessed. If you file Chapter 13 approximately within two weeks of the repossession, you may be able to have your automobile returned to you. It is important to act fast if you desire to file Chapter 13: you can only get the automobile back for a short period of time. The Chapter 13 must also be filed before the automobile is re-sold.
YOU WILL PAY YOUR AUTOMOBILE LOAN THROUGH THE CHAPTER 13 PLAN
By filing your Chapter 13 case, your automobile creditor will be forced to receive their payments through the Chapter 13 plan. This means that your “payment’ will then be up to date. The first Chapter 13 payment is due 30 days after the Chapter 13 is filed. Many times your new payment may be lower than what you were paying before. You can frequently “cram” your car loan down to market value. Other times, the restructuring of the payments alone can result in your automobile payment being lower through the Chapter 13 case.
CHAPTER 13 CAN MAKE YOUR AUTOMOBILE SITUATION WORK
Chapter 13 can simply make your automobile situation work. A powerful reason to file Chapter 13 is to both protect your car and reorganize your payments. If you need to protect your automobile and make it more affordable, Chapter 13 could be an option that will make an impossible situation much more manageable.