When you file bankruptcy, the automatic stay policy goes into effect, which may let you keep a vehicle in chapter 13 by making monthly payments. As long as you follow the rules the automatic stay policy prevents repossession, and remains in effect until the court discharges your case. Today we'll teach you more about how this can help you keep your car.
What the Automatic Stay Policy Means for Your Car
Depending on when you bought your car there are different rules for the automatic stay policy. If you bought the car within 910 days of your bankruptcy filing you will have to pay the full loan amount, although it may be possible to reduce your interest rate. If you bought the car more than 910 days prior to your bankruptcy filing, you will only be required to repay the car's fair market value.
If your vehicle was repossessed prior to filing bankruptcy, and you wish to get it back, you will have to act quickly. The vehicle will typically be returned as long as you file bk within 21 days of the repossession, provided that you prove you have proper insurance. If you don't have the proper insurance, they may request relief from the automatic stay policy, and you won't get the vehicle back.
What to do if You Lose Your Vehicle
If for some reason you lose your vehicle due to lack of proper insurance, or not being able to make the payments, you may want to buy another car. You will have to obtain an authorization to incur new debt from the court before going any further. As long as they grant the authorization you will be given a budget for your new vehicle.
You will then need to get a car loan while in chapter 13 bankruptcy. Here at BankruptcyAutoFinancing.com we make the process easy. Simply fill out our easy online application to get started. We will set you up with a local subprime lender who will give you the best deal, and help you to rebuild your credit.
Remember we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.