With all your other outstanding debts and monthly bills, you may struggle to keep up with your car payments. But at the same time, you may be unwilling to give up your car, as you utilize it for a secondary means of income (i.e., ridesharing or deliveries), which is particularly helpful right now, or otherwise to commute to your workplace to earn your primary source of income. If you are desperate enough to keep your car, you may consider a bankruptcy petition for its necessary protection. With that being said, please follow along to find out whether filing for Chapter 13 bankruptcy is a viable attempt at catching up on your missed car payments and how a proficient Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C., can fight to prevent the unfortunate outcome of repossession.
How does Chapter 13 bankruptcy help if I’m behind on my car payments?
As you may have heard before, Chapter 13 is also commonly referred to as a wage earner’s plan or reorganization bankruptcy. This is to say that, through this bankruptcy type, your past-due car payments may be spread out over a three- to five-year repayment plan. And so, you may reorganize this debt into manageable monthly payments. It is worth mentioning, though, that your repayment plan will also require you to keep up with your ongoing monthly car payments.
This Chapter 13 bankruptcy plan differs from a refinancing plan that would take place outside of court. For the former, the New York State Bankruptcy Court may stop immediate repossession pressure and prevent your lender from demanding a lump-sum payoff. For the latter, your lender may be free to hit you with additional interest and fees. At the end of the day, though, your attorney may advise you on whether or not bankruptcy is too drastic a measure and if refinancing would be more realistic for your current financial situation.
Can Chapter 13 help if my car has already been repossessed?
Unfortunately, your lender may have already repossessed your car. This may have prompted you to spring into action and declare bankruptcy. Well, Chapter 13 can help you get your car back, so long as you file the petition quickly. Namely, before your lender has the opportunity to take it to auction. This is because once it is sold, it may be too late to reclaim it. This is why we suggest that you contact an attorney so that they may intervene on your behalf as soon as possible.
If this happens, though, a Chapter 13 bankruptcy filing may still help you to some extent. That is, you may still address your remaining car loan balance through your three- to five-year repayment plan. Plus, by successfully moving through this plan, you may be able to convince the court to approve the purchase of a new car. Here, you must show that the proposed loan terms fit into your existing plan and that this purchase is a necessity (i.e., to continue earning an income or commuting to work).
So, if you wish to gain more clarity on the situation you are dealing with, the best way to get it is by consulting with a talented Rockland County bankruptcy attorney. Get in touch with our team at The Law Offices of Allen A. Kolber, Esq., P.C., today.
