For many of us, daily living in the United States requires access to a car. There is a research-affirmed correlation between car ownership and stability and income. This makes sense: jobs, doctors, and schools are often only reachable by a car in many areas.

Unfortunately, many people own cars that they cannot afford, something I see often as a Memphis bankruptcy attorney. According to recent studies, roughly 44% of all American adults are relying on an auto loan to pay for a car and a record 7 million are behind on payments. For context, at the end of the last recession, in 2009, it was a million less.

Falling behind on a car payment is serious

Here’s a story about former clients of mine, Paul and Kim, who lost their car in the middle of the night. They were a nice couple who had fallen behind on payments through no fault of their own. Paul was unable to work because of illness, so he could not work to pay off the debt even though he wanted to.

One day, they woke up and found their car gone. They immediately checked the impound list but did not see it there. Like many people who find themselves in this predicament, Paul ignored the threatening calls from his car company for too long.

Chapter 13 bankruptcy is your best defense against repossession

I filed a Chapter 13 bankruptcy for Paul and Kim, the clients I mentioned above, and demanded the return of the car, which was quickly granted. I consolidated all of their debts, including the car, into a monthly payment they could afford. With more cash flow, the family got back on their feet, and eventually Paul returned to work.

Chapter 13 consolidates your debts into an affordable repayment plan spread out over three to five years. It has the power to stop both repossession and foreclosure.

Another benefit of Chapter 13 is that it can also stop you from paying more than the value of your car. The courts will base your new monthly payment off of the market value of the vehicle today. So if you bought a car for $20,000 but now it’s only worth $13,000, you could lower the monthly amount to reflect the difference.

Get help from a Memphis bankruptcy attorney today

The heartbreak and headaches of car repossession is avoidable. There is an easy way out through bankruptcy. We will help you get back on track before it’s too late.

Financial hardships are stressful and emotionally exhausting, but there is always hope. Call (901) 327-2100 today or contact us here for a free consultation.