Worried About Your Car Loan?
Is your auto lender threatening to repossess your car because you haven’t kept up with your payments? Are you looking for a way to lower your payments so you can afford to keep your car? Or are you looking for a way to give it up without getting charged any more money?
I’m Ivan Trahan, an experienced California bankruptcy attorney based in Temecula. I have helped many clients use the tools offered by Chapter 7 and Chapter 13 bankruptcy to fight the consequences of repossession. Contact me today to schedule a free consultation.
Cram Down and Restructure Your Debt
An auto loan is a secured debt and therefore cannot be discharged in bankruptcy. However, Chapter 13 bankruptcy may help you avoid repossession by lowering your payments.
If you have made more than 35 payments on your car and its current book value is less than the remainder of what you owe on it, the bankruptcy court can reduce your outstanding debt.
Some of my clients have been able to save thousands of dollars by cramming down their auto loans through Chapter 13 bankruptcy.
If you are behind on your auto loan, it is also possible put your arrears (late or missed payments) on your Chapter 13 repayment plan so that you have three to five years to repay them. For some people, this is another way to avoid repossession.
Eliminate Deficiency Balances and Penalties
If you are not able to avoid repossession, your lender may take your car, sell it off at a low price and then charge you for the remainder of what you owe, as well as the cost of selling the car. Of course, the last thing you want to do is keep paying for a car you no longer have.
Filing Chapter 7 bankruptcy can stop repossession so you can give up your car without being charged a deficiency balance or the cost of sale. If your car has already been repossessed, these debts can be discharged in Chapter 7.
If you are in danger of repossession, you should consult an experienced lawyer before deciding what to do. Don’t hesitate to contact me to learn more about your bankruptcy options.