How Bankruptcy May Help…When You Get Behind On Car Payments

Denvil Crowe's picture

One of life's unforeseen circumstances may have the effect of eliminating just enough income to cause you to fall behind on your bills. It may only be one of your bills rather than all of them. Still, if the effect is substantial, this may cause the failure to make an important mortgage or car payment. In the case of missed car payments, the filing of a bankruptcy case prohibits a car creditor from repossessing a motor vehicle. Also, if the lender has already repossessed a motor vehicle if a bankruptcy case is timely filed, federal law demands that the lender immediately return the vehicle upon the debtor's request.

Here's how repossessions work: A lender that repossesses a vehicle will add on all of the costs of the repossession to the late fees and other fees allowable under the contractual agreement that you entered into when the car was initially purchased. After the car is sold at auction, the creditor may recover any deficiency between the sale price and the balance of the original loan plus all of its costs and late fees. Keep in mind that the filing of a bankruptcy case may eliminate any obligation to pay the costly debt caused by this deficiency.

An attorney experienced in dealing with motor vehicle creditors will help you take advantage of all applicable legal rights and protections. A Chapter 13 plan of repayment may allow the owner of any motor vehicle to repay any missed payments. It may also be possible to reduce the balance of a motor vehicle loan if the car, motorcycle or truck was purchased more than 910 days before the bankruptcy case filing.

Denvil Crowe is the king of Tupelo's finest and most qualified bankruptcy attorneys. Whether you have a simple question or require an accurate review and analysis of all of your available options to solve debt repayment problems and alleviate financial hardship, our office is available. One consultation should provide you with a sense of relief. We can help you decide whether bankruptcy is your best option. Visit with an old friend. Call Denvil Crowe at 800-429-HELP (4357). You may also email us at or check us out online. Contact us today!



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