Stopping Car Repossession

Something that worries many people when facing financial difficulties is the possibility of vehicle repossession. After all, if a lender repossesses your vehicle, it can be more challenging to go to work and earn the money you need to pay all your other bills. Without your car, you may take public transport to medical appointments and for shopping for your family, which requires a lot longer than driving yourself, further hindering your ability to work as much as you would like. At a time when you are facing significant hardship because of financial difficulties, you don’t need to add to your worries by losing your car. Filing for bankruptcy with the help of our vehicle repossession lawyer is one way to move toward stopping car repossession.

When you file for Chapter 7 or Chapter 13 bankruptcy, an automatic stay will occur on all collection activities. You may be able to protect your car from liquidation through the Alabama wild card exemption under Chapter 7, but Chapter 13 offers a tool specifically designed to allow you to keep your car in the face of potential vehicle repossession by the lender. This may feel like you are using car repossession loopholes, but, in reality, using a bankruptcy filing for stopping car repossession is a completely legal tool that gives you the time you need to try to straighten out your financial situation. Grainger Legal Services is ready to help you. Contact us today to discuss your case in a free consultation at 334-260-0500.

Let Our Vehicle Repossession Lawyer Help You with Stopping Car Repossession

Suffering a car repossession can be a scary process. It can be an emotional jolt when you are walking out the door to go to work, and your car is no longer in the driveway. Not having a car can completely upend your life, especially when other family members rely on you for rides to school and medical appointments. Being unable to drive to work potentially can cost you your job, delivering a double-whammy to your financial woes.

The good news is that our team knows how to use bankruptcy laws to give you a chance of stopping car repossession. You have to take the first few steps quickly, because, if you wait too long, we may not be able to keep your car from disappearing through repossession.

  • First, have a realistic handle on your financial situation. Don’t fool yourself into thinking that you suddenly will have a financial windfall that will fix everything.
  • Second, look ahead a month or two and decide whether you may struggle to make your car payment on top of your other expenses. Again, be realistic about what you are facing.
  • Finally, if you know that you are going to have a difficult time making your car payment or if you are already delinquent, reach out to us. Choosing our bankruptcy lawyer may give you the best chance at avoiding a repossession, but you must contact us as early as possible in the process.

What Happens in a Car Repossession?

When you purchase a car by taking out a loan, you are making a promise to the lender that you will make the payments on time each month. Because you are using the value of the car as the collateral for the loan, this creates what’s called a secured loan. The lender is willing to loan you the money because it believes you will make all the required payments. However, should you fail to make the payments, the lender knows it can take back the car and sell it to someone else to recoup the value of the loan.

If you are late with a payment at any point, the lender has the right to take back the car, according to Alabama Commercial Code § 7-9A-609. The creditor does not have to notify you before undertaking the repossession. However, the lender often will reach out to you when you are late on a payment to see if some sort of mistake occurred. Some lenders may give you a grace period of missing a couple of payments before they consider repossession of the car. Ultimately, though, it is up to you to stay current on payments to avoid the possibility of repossession.

During the repossession, the lender may hire a third party to take possession of the vehicle. This third party cannot threaten you or use force to take the vehicle. It cannot damage your personal property in the process of taking the car, such as breaking a lock or cutting through a fence. However, the third party could take the car while you are asleep or shopping, and it does not need to give you any notification about taking the car.

When Stopping Car Repossession with Bankruptcy, You Must Start the Process Early

If you are planning to use bankruptcy as a means of stopping car repossession, you need to contact our vehicle repossession lawyer as early as possible. If the lender already has possession of your car, filing bankruptcy is not going to help you maintain ownership of your car. It is too late for that avenue to work (although filing for bankruptcy may still have some other benefits to your financial situation). Instead, when you know that you are going to miss a car loan payment or if you already missed a payment – but the car is still in your possession – this is the time to reach out to our vehicle repo lawyer for a discussion.

The earlier we can begin studying your situation, the better chance we will have for using bankruptcy as a tool to put a halt to any repossession efforts regarding your car. Waiting until the lender is driving your car away from your home is too late. By contacting us early, we can fully study your situation and make recommendations on the best way forward, based on the unique circumstances in your case. At Grainger Legal Services, we offer emergency after-hours appointments, if that would be helpful for your situation. For a discussion of your case in a free consultation, call our Montgomery bankruptcy lawyer at 334-260-0500. Additionally, you can contact our team in our Prattville location at 334-361-8550 or our Troy location at 334-770-4500.

Stopping Car Repossession with Chapter 13

Filing for Chapter 13 bankruptcy allows you to keep your possessions, as long as we file for bankruptcy with a plan to show how you will use your disposable income to repay creditors over a three- to five-year period. Your debt repayment plan must deal with any back payments you owe on the car, in addition to staying current on payments you owe during the repayment period. You don’t have to immediately bring the back-payments on the car current, but you will have to make adequate protection payments between the time you file for bankruptcy and the time the court approves your payment plan. Our team can help you arrange for adequate protection payments through your plan.

Grainger Legal Services Doesn’t Rely on Car Repossession Loopholes

Trust our team of bankruptcy attorneys to use legal means to try to do everything we can to help you avoid a repossession of your car through the filing of bankruptcy. We do not use tricks or unrealistic advice to try to convince you to hire us. You can count on Grainger Legal Services to be as honest with you as possible about the situation you are facing and about your options for trying to avoid a car repossession.

Our Vehicle Repo Lawyer Can Help with Cram Downs

Cars depreciate rapidly after you purchase them. At some point during your ownership, your car loan’s outstanding balance may be greater than the car’s value. When you file for Chapter 13 bankruptcy with the help of our vehicle repo lawyer, you may be able to reduce the amount of your upside-down car loan balance through the procedure known as the “cram down,” as discussed in the Alabama Law Review. To use this tool, you need to have purchased your car more than 910 days (or two years and six months) ago, and your car loan’s balance must be greater than your car’s market value.

As part of filing for Chapter 13 bankruptcy, we can ask that the current value of the car become the secured loan value, not the entire remaining loan balance. Any amount beyond the value of the car would become an unsecured debt. Like other unsecured debts that are part of a bankruptcy filing, this debt becomes subject to discharge once you complete your debt repayment plan.

With Chapter 7, Can Bankruptcy Stop Repossession of a Vehicle?

Filing Chapter 7 bankruptcy allows you to keep some exempt property and does not require you to file a repayment plan. You must pass a means test to determine whether you qualify to use Chapter 7.

If the vehicle becomes exempt property, you may be able to protect your car from being liquidated in a Chapter 7 bankruptcy by using a wild card exemption. However, this exemption may not protect it if the lender decides to repossess it. All collection activities, including vehicle repossession, are stayed during Chapter 7 bankruptcy. However, a lender can ask the court to lift the stay with respect to your car, allowing the lender to repossess it. You can use negotiation or cure your default to prevent the lender from repossessing in this case. However, using a cram down through Chapter 13 may be a better solution for you. Our Chapter 7 bankruptcy lawyer can meet with you to study your situation and give you advice about whether Chapter 7 is a realistic option for stopping car repossession in your case.

If Your Vehicle Is Repossessed, Can You Get It Back?

If your vehicle is repossessed, you may be able to get it back, but simply filing for bankruptcy will not be enough to force the lender to return the car. In Alabama, as Alabama Legal Help points out, once the lender repossesses the car, you cannot regain possession of the car through a bankruptcy filing alone. This means that if you are stopping car repossession through a bankruptcy filing, you must do so before the lender takes possession of the car.

You may be able to work out a deal with the lender where you will immediately bring the loan current with a lump sum payment after filing for bankruptcy, and the lender will return the car to you. The terms of the loan would then continue from that point. However, after it already repossessed the car, the lender is under no obligation to do this for you. Some lenders will return the car to you after a repossession only if you pay the entire amount you owe on the loan in a lump sum payment. You do not necessarily have to file for bankruptcy to use these lump sum payment options, although if you hire our team, we may be able to help you negotiate with the lender to try to regain possession of your car.

Do Any Car Repossession Loopholes Exist That Can Help Me?

Although it would be nice if there were car repossession loopholes that would allow you to keep your car without fear of repossession when you fall behind on making payments, no such loopholes exist. You will need to follow the legal aspects of filing for bankruptcy, or you will need to immediately bring your loan current by paying what you owe, to try to stop repossession of your vehicle.

Call Grainger Legal Services Today: We Help People Get Out of the Hole

Our team of bankruptcy lawyers has been helping people in Alabama file bankruptcy to deal with difficult financial situations for multiple decades. We know that people can find themselves in financial trouble for a variety of reasons. We will treat you with compassion and understanding, but we also will be realistic about your situation. We will not lie to you to make you feel better. We want you to be able to trust us, so you can feel comfortable sharing all the information we need to know about your financial situation. After taking the time to learn everything about you, we then will be able to develop a solution that fits your personal situation. For a free case review, call Grainger Legal Services today at 334-260-0500.

No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.

Client Testimonial

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Attorney Charles Grainger

Attorney Charles Grainger possesses decades of legal experience focused on debtor-creditor law, bankruptcy, and business law. His legal work is designed to help clients overcome debt and secure a stronger financial footing. He also provides legal services to entrepreneurs and business owners. Grainger Legal Services takes a comprehensive approach to debt relief and financial education for clients in south-central Alabama. [ Attorney Bio ]

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