To get around the Lafayette area, you likely depend on your vehicle to get to work and drive children to their events. If you fall behind on a car payment or two, you may start getting threatening phone calls from your lender. Are you starting to feel like there's no way to avoid the repossession?
Hope remains. Bankruptcy may allow you to keep or potentially get back your vehicle. Additionally, your interest rate or the outstanding balance on a loan might also be lowered.
In this post, we discuss several of the options in general terms. Because each situation is different, a bankruptcy attorney can help you determine which of these best meets your needs.
Ways to save your car
Repossession is not good for anyone. According to a 2012 Experian survey, lenders lost an average of more than $7,000 when they needed to repossess a vehicle. You can avoid repossession or get your car back by:
- Making up the late payments (and fees) - Even if you have missed a few car payments, you are not in default until you receive a written letter from your lender. But you can pay late payments and any late fees before receiving this notice to come current. If you make up the payments, but not all the late fees, you still run the risk of a car getting repossessed.
- Extending the loan - this tacks the missed payments onto the back end of the loan. Interest will continue to add up and is added into the extended plan. For long-term problems, this may not provide a complete solution.
- Reinstating the loan - making a lump sum payment after your vehicle has been repossessed if one way that you might be able to get it back. Your lender must be willing to work with you and would need to accept your offer of a lump sum payment before you can get your car back.
- Declaring bankruptcy - this can halt the repo process. You may be able to work out a way to keep your car during the bankruptcy process. Chapter 13, for instance allows you to keep property and reorganize debt into a payment plan over three to five years.
Do not speak with a lender before consulting an attorney. What you say can limit the number of remedies you have available. It could also put you in a more difficult position to negotiate.
Call the Richoux Law Firm to talk with me about your options. Trying to ignore the issue will not make it go away. The sooner you start dealing with the situation, the better the outcome