Like a thief in the night, a car lender will stealthily come and pick up your vehicle for non-payment. You still have options before they sell your car at auction. From the day the lender repossessed your vehicle, you will have approximately 10 days to cure the default before the car is sold. One way of getting current is by filing a Chapter 13 Bankruptcy. Within 24 to 48 hours of filing the Chapter 13 Bankruptcy, the lender must return the vehicle to you. A Chapter 13 Bankruptcy is a reorganization plan and will allow you to either pay the arrears or the entire vehicle through the Chapter 13 Plan over a period of 36 to 60 months. In addition to restructuring the amount owed, the Chapter 13 Bankruptcy will allow you to reduce the interest rate, if necessary, to as low as 5.75%. If the vehicle was purchased at least 910 days prior to the filing of the Chapter 13 Bankruptcy, the bankruptcy will allow you to cramdown the loan. A cramdown allows you to pay back the value of the vehicle, not the outstanding balance. For example, if you owed $20,000 on a vehicle that Kelly Blue Book says is worth $10,000, then you are only required to pay the lender the $10,000 at no more interest rate then 5.75%.
It is best to file the bankruptcy before the repossession, just because of the additional fees the lender adds on to the loan, but all is not lost if you contact our office within the 10 days.