How Does Bankruptcy Stop Repossession?
Many people in these hard economic times are having problems paying back their bills. If you fall too far behind on your bills, you may end up facing repossession. Is it possible to end the creditor calls and prevent your car from being taken away from you by the repo man? Yes it is. Bankruptcy might just be the second chance you need.
It is easy to feel powerless when creditors are calling non-stop. A lot of people don’t understand that a bankruptcy provides legal protection from creditors keeping the repo man away from your assets.
Filing for Chapter 13 bankruptcy can prevent your car creditor from repossessing your car. In many cases bankruptcy provides a structured repayment of the debt and can even reduce the balance and interest rate that you have to repay. If you have had your car at least 910 days then we can usually “cram” down the repayment to just the actual value of your car.
How is that possible? Bankruptcy law is federal law. The moment your case is filed you are given legal protection from creditors. This includes an automatic freeze on repossession efforts.
Bankruptcy provides consumers with options. Contact our office today to see what options are available.
How Can Bankruptcy Help Me Keep my Car?
Bankruptcy can be very helpful in alleviating financial hardship by protecting property that may be in danger of repossession. Filing Chapter 7 or Chapter 13 bankruptcy will immediately stop repossession of your vehicle under the “automatic stay” provision of the Bankruptcy Code.
The automatic stay is an order from the Bankruptcy Court issued to all creditors as soon as a bankruptcy petition has been filed. It prevents creditors from making any further collection attempts against you or your property, which includes repossession of you vehicle.
Can I Hide the Car from the Car Creditor?
Georgia Code Section 11-9-503 notes that repossessions cannot, however, “breach the peace” in the process. This means the company cannot break into your garage to retrieve the vehicle. Also, it cannot move other vehicles out of the way in a private driveway or public parking situation to reach the car being repossessed.
If unable to repossess your car without breaching the peace, the lender may then pursue judicial involvement to obtain its property and seek criminal charges against you. Don’t play games though with the car creditor. You could end up with a criminal warrant issued against you!
What Happens if My Car if Repossessed?
Once your car is repossessed, the car creditor typically sells at a car auction. Usually, the price they get for it at auction will not cover what you owe them under the contract. In Georgia, the car creditor will then turn around and sue you for the rest of the money owed on the contract. At this point you now owe for a car that you don’t even have.
In Georgia, if the car creditor wants to pursue a deficiency the car creditor must provide you with notice within ten days from the day of repossession, of its intention to pursue a deficiency as well as notice of your right to redeem the property.