Vehicle Repossession and Bankruptcy
(Filing Bankruptcy May Be The Solution You Need)
My Car Is Going To Be Repossessed – Can Filing for Bankruptcy Help Me?
Repossession of a vehicle can be due to financial trouble and can cause the most stress. In Florida, unlike other parts of the country, we need our cars to go to work, take kids to school, doctor appointments, and buy medicines and groceries. The fear that the “Repo Man,” will come and take your vehicle is an added stress (and can be embarrassing) you do not have to face. If you are afraid that your car will be repossessed because you haven’t kept up with the loan payments, you may be wondering if filing for bankruptcy will help you keep your car.
The Good News is: Filing for bankruptcy in Florida can assist you keeping your car and STOP repossession actions temporarily.
If Your Car Has Not Yet Been Repossessed
In Florida, when you have stopped making car loan payments, by filing bankruptcy an automatic stay is placed on all repossession actions. That means that the lender is prohibited from repossessing your car. This gives us time to access your options and consider the value of the car versus the amount owed and other factors. You may decide you want to keep the vehicle and we negotiate new terms for you to continue to make payments, or you may decide you do not want the car and give it back to the bank and the outstanding loan amount will be taken care by the bankruptcy.
We do not have an endless amount of time to consider your plan, because the lender may file a Motion to Lift the Stay. Basically, they are asking the bankruptcy court if it can proceed with the repossession. Most courts will allow the lender to proceed with the repossession unless you plan to reaffirm the automobile loan.
In the rare case that you have nonexempt equity in your car. Meaning the value of the car exceeds the vehicle loan, then the bankruptcy trustee is entitled to sell your car and distribute the proceeds to your creditors.
If Your Car Was Repossessed Before You Filed for Bankruptcy
In the event, your car has been repossessed then bankruptcy is still a helpful tool. You still owe the remaining balance on the loan to the bank. Fortunately, in Florida filing bankruptcy can eliminate this debt. That means after the bank repos the car and sells it off, there is often a large deficiency or shortage to pay off the loan. The shortage can be thousands of dollars. Because the bank wants to be made whole, they will sue you for the shortage. The Good news is that declaring bankruptcy can be a solution to this problem.
Call The Marin Law Firm, P.A. and attorney Carmelina Marin today for a consultation to strategize, evaluate and consider if filing for bankruptcy is a good choice for you and your family.