car-repo-in-atlantaOur Atlanta Attorneys Can Stop Car Repossession

If your car has been repossessed, or it is about to be taken, bankruptcy can help with car repos, but you should contact us at once.  Time is of the essence with respect to repossession and bankruptcy in Atlanta. By filing a Chapter 13 for a repossession, you can keep your vehicle (or get it back) by paying for the amount you owe on the car spread out over 60 months.

How to Stop A Car Reposession

Step 1

First, the interest on vehicles can always be reduced. The amount paid in interest depends upon several factors, including your credit history, your car payment history, your income, and your likelihood of success in bankruptcy. In other words, interest is calculated on risk, and can be reduced to anywhere between 3.25-6.25%.

Step 2

Second, the amount paid on a vehicle depends on how long you’ve owned the car. If you have owned your car longer than 910 days, or 2.5 years, then you are only required to pay back the fair market value of the car, in contrast to the amount you actually owe on it. Courts determine fair market value based on the amount a consumer would pay for a vehicle of the same condition at retail. So, if you’ve owned your car for 2.5 years, and you owe $20,000, but the car is only worth $12,000, then you would pay $12,000 divided over 60 months, in addition to interest. This can bring a huge savings and is a great benefit to filing bankruptcy.

Step 3

If you have purchased your car within 2.5 years, you are required to pay back what is owed. You will still benefit from the reduced interest, however.  If your car has been repossessed by a creditor within 10 days and has not been sold, you can get your car back by filing Chapter 13 bankruptcy, although you may be required to pay repossession and storage fees. A creditor who sells your car before 10 days have passed cannot collect a deficiency, so creditors almost always wait 10 days before selling the car. If your car has been repossessed, but the creditor has not sold the car, you can still get it back through bankruptcy. We have had cases where automobiles were repossessed and our client waited to file bankruptcy over a month after repossession, and we were still able to get it back. However, there is no guarantee in these situations, so if your car has been repossessed, it is best to file bankruptcy immediately in order to increase your odds of retrieval.

Stop Car Repossession With a Chapter 7 Bankruptcy

It is possible, however infrequent, to stop or retrieve a repossession by filing a Chapter 7 bankruptcy. This process, called “redemption,” only works when you can pay the amount of the vehicle’s fair market value within about 3 months after filing. So, if your car, worth $5,000, for example, is repossessed, you can file a Chapter 7 bankruptcy and keep the car if you can come up with $5,000 right after filing. This usually doesn’t happen because people who file Chapter 7 are usually cash-poor. Redemption usually only occurs around the beginning of the year—tax time—or when someone can get the money from a family member.

If your car has been taken or is about to be repossessed, contact us at 404.585.0040 immediately. You can also find us on Google +. The sooner you contact us, the better your chance of avoiding the hassles of repossession.