Have you fallen into heavy debt that is making car payments infeasible? Missing payments, or sometimes just one payment, might make your vehicle subject to repossession. Since your vehicle is your livelihood in many regards – think about how often you use your car for errands and necessary trips and then imagine not having it – you need to start thinking about how you can prevent repossession right away. The methods you use will differ depending on a few factors, including how much debt you have and where you purchased your vehicle.
Challenging or Delaying the Repossession of Your Vehicle
If your car or truck is financed with a second chance lender, like a “buy-here-pay-here” car lot, small finance company, or title pawn, you may not have much time before you face the threat of repossession. In most situations, such lenders will not provide borrowers with much leeway before they decide to exercise their right to repossess. It is not even unheard of for some lenders to repossess an automobile within just a few days of delinquency without any prior notice. What can you do to act just as quickly and protect your investment?
Filing for bankruptcy protection stops all collection activities from lenders and third parties that have an interest in your finances, including automobile repossession. It does not matter where your car is financed, the bankruptcy stay will protect your automobile from immediate repossession and any future repossession attempts until further notice. Even if your car or truck has already been repossessed, it is entirely possible to get it back with the help of Bournakis and Mitchell, P.C. and the Northwest Georgia bankruptcy attorneys at our firm. But you must act quickly – contact us right away if your car has been repossessed!
As long as the automobile has not been sold by the creditor, a bankruptcy halts the sell and forces return of the automobile to the borrower. Most of the time, your automobile can be returned to you in a matter of days and you will not be responsible for paying repossession costs or storage fees. Keep in mind that a creditor will be aware of this possibility and may make all attempts to rapidly sell your repossessed vehicle to another buyer, eliminating their duty to return it.
Surrendering Your Automobile & Other Concerns
What will happen if you decided to surrender your car or truck back to the lender, though? Surrender of an automobile back to the lender is not the end of the story by any means. After repossession, a creditor will likely auction the car and pursue the borrower for any remaining balance on the loan. Pursuant to Georgia law (O.C.G.A. 10-1-36), in order to collect upon a deficiency balance on an automobile loan, a lender must give the borrower written notice of their intent to sell the vehicle within ten (10) days. If the lender sells a car without notifying the borrower, the lender will forfeit their right to pursue the borrower on any amounts remaining on the loan.
“Buy here, pay here” car lots, finance companies, and title pawn companies are more likely to quickly re-sell the automobile instead of going through the expense of sending a letter and auctioning the vehicle. A car lot can simply place your car back on the lot the next day and slap a low price tag on it to attract a new buyer, as aforementioned. A borrower in Chapter 13 bankruptcy can propose to repay the remaining balance owed at a low interest rate over a term of as long as 60 months. The interest rate savings alone can allow a struggling borrower to keep a car that they might not otherwise be able to afford. In addition, depending on the age of the original loan, a borrower may be able to pay the value of the automobile instead of the full balance.
All in all, you do have your options to stop repossession and rearrange your finances. To learn more about them, please do not hesitate to contact our Northwest Georgia bankruptcy lawyers. We genuinely enjoy working with clients and helping them find more comfortable futures through bankruptcy or other alternatives.