If you are behind on your car loan payments or other secured loan payments, the creditor may take steps to repossess the collateral securing the loan. In other words, your car may disappear in the middle of the night.
You need your car to take care of your family and get back and forth to work, but you are struggling financially right now. Is there a way you can stop repossession and make your car payments affordable? Yes, you might be able to file a Glendale Chapter 13 bankruptcy case to save your car or other property.
What is a Secured Debt?
A secured debt is money that you owe to a creditor that is secured by a lien on your property. Motor vehicle title loans, boat loans, and mortgages are the most common types of secured debts. However, you may also offer household items or other assets to secure a personal loan.
If you fall behind on your payments to a secured creditor, the creditor may repossess the collateral to satisfy your debt. In Arizona, a lender that holds a lien on your car title can repossess your vehicle without a court order if the repossession is “peaceful.” Peaceful means you did not object to the repossession, which is why repo companies take cars in the middle of the night or when you are not at home.
Filing Chapter 13 to Stop a Repossession in Glendale
If you fear your car is about to be repossessed, secure the car in a safe location and contact our Glendale repossession attorneys immediately. We review the requirements to file Chapter 13 with you, analyze your financial situation, and calculate an estimated Chapter 13 plan payment to help you decide if filing Chapter 13 is right for you.
A Chapter 13 bankruptcy case is a debt repayment plan. Most Chapter 13 plans are calculated based on a five-year term. You pay monthly payments to the Chapter 13 trustee, who then pays your creditors according to the terms in your plan. In most cases, general unsecured creditors (i.e. medical bills and credit card debts) receive just a small percentage of the amount owed on each account to satisfy their debts. Other debts, including tax debts, may need to be paid in full through the Chapter 13 plan.
Most car loans are included in the Chapter 13 plan. Depending on how much your car is worth and how long you have owned your car, you may be able to “cram down” the loan through your Chapter 13 plan. A cram down refers to paying the secured creditor an amount equal to the car’s fair market value to satisfy the lien on the title. A cram down only works if you owe more than your car is worth, and you have owned the vehicle for a certain period.
Even though you may not be able to cram down the car loan, you can still spread out the car loan payments over five years to make the car affordable to keep.
Does Chapter 7 Bankruptcy Stop Repossession?
Filing a Chapter 7 bankruptcy case stops repossession temporarily. Chapter 7 cases are liquidation cases. You do not have the option of catching up on your car loan payments over time through Chapter 7.
However, there could be other options available for working with your lender to keep your car in Chapter 7. Our Glendale repossession lawyers can review your situation and advise you of your options regarding repossession and Chapter 7.
Contact Our Glendale Repossession Attorneys for More Information
You need to act quickly to save your car from repossession. You may be able to get it back if you file a Chapter 13 case within 10 days of the repossession date, but you need to hurry.
The legal team of Allegiant Law Group is here to help. Call 602-562-1000 now to schedule your free consultation with a Glendale repossession lawyer.