Most of us know that if we don’t pay our car payment then our vehicle might be repossessed. You may wake up one morning and find your car missing from your garage or your driveway. You may come out of the grocery store and find your car missing from the parking lot. If this happens to you then hopefully you didn’t buy to many perishables! If you aren’t current on your car payments then before you call the police and report the vehicle stolen you should call your car loan creditor and ask them if they have repossessed the vehicle. If you live in McKinney, Texas, the second person you should call is a local bankruptcy lawyer.
Bankruptcy is a great tool for protecting property from seizure by creditors. This means that if you have missed car payments and are in danger of having your car repossessed, then filing bankruptcy will prevent that from happening. Chapter 13 bankruptcy can be used to prevent repossession and to pay off the claim, often at better terms than under the original contract.
In Texas, Chapter 13 bankruptcy can even be used to force creditors who have already repossessed a vehicle to give it back. Debtors have ten days to redeem a vehicle before it can be sold at auction. Assuming the bankruptcy filing takes place before the vehicle is sold then it must be returned to the debtor. However, the debtor must provide proof of insurance to the creditor. Also, it is very likely in this situation that the vehicle will be returned with some damage as a result of being towed. It is always best to prevent the repossession from ever taking place rather than filing bankruptcy and forcing the creditor to return the vehicle after the repossession.
If you aren’t in Texas and your vehilce has been repossessed then you should contact a local bankruptcy attorney. The ability to file bankruptcy and force a creditor to return the vehicle depends largely upon the state laws governing sale of the vehicle after the repossession. The quicker a vehicle can be sold after repossession the quicker you must act to prevent that from happening.