Miami Repossession Lawyer
Seeing your beloved car, truck or boat repossessed can be a genuinely traumatic experience, and even those who are having financial troubles will generally do all they can to try and avoid it. If you are in danger of losing your vehicle, though, there is an option you can explore before the repo man comes calling – filing bankruptcy may preserve your vehicle, if you act quickly enough.
When bankruptcy is filed, under Chapter 7 or 13 of the U.S. Bankruptcy Code, an automatic stay comes into force immediately. This means that all creditors must cease collection efforts against that debtor, so that the bankruptcy trustee eventually assigned to their case can accurately determine the assets that can be leveraged to pay off debts at that point. Once the automatic stay is in force, the repossession cannot go forward.
The one major catch in this scenario is that the bankruptcy filing mustoccur before the repossession occurs. The automatic stay only stops collection efforts which are ongoing; it does not require that any efforts which have been successful (which is essentially what a repossession is) to be turned back or undone. Also, if you do manage to file before the repossession, you may still be required to give the holder of your car loan certain assurances – either in the form of “adequate protection” payments during a Chapter 13 (usually the same amount as your car payment) or by selling certain assets to be able to pay a certain percentage owed in a Chapter 7.
New Loans During Bankruptcy?
One fact that many debtors remain unaware of until perhaps too late is that in some cases, there is actually a way to obtain better terms on the loan for their vehicle, even during bankruptcy. In Chapter 7, this is called a 722 redemption, and it only applies if the asset in question has been exempted during a personal bankruptcy. If you do not exempt your vehicle, this may not be available to you.
In Chapter 13, this procedure is referred to as a cramdown, because the value of the loan is “crammed down” to just the market value of the vehicle. This option is available to those who have purchased the vehicle at least 910 days (roughly two and a half years) before your Chapter 13 filing. If you are able to have your loan “crammed down” to market value, though, you still must establish a repayment plan under Chapter 13 as you would in any normal bankruptcy.
Contact A Miami Repossession Lawyer
If you have had a vehicle repossessed after default on the loan, or you are in danger of having it occur, contacting an attorney quickly is imperative. The Miami repossession lawyers at the firm of Nowack & Olson, PLLC have experience in this type of case, and can help you fight to make sure you preserve as many of your assets as possible. To schedule an initial consultation, contact us via our website or by phone today.