By: Darrell Castle
You can miss a car payment for many different reasons. But a key question to ask yourself is, when are you going to make that payment up?
Is this missed payment a one-time mistake? Or is it a product of an ongoing financial problem that could keep burdening you down the road?
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That’s an important question to answer because it’ll ultimately decide the move you want to make.
When you miss a car payment, a legal process will start. Initially, you’ll receive threatening calls and letters from your creditor. The creditor will threaten to repossess your car. And eventually, if you don’t make your payment, then your car WILL be repossessed.
However, the creditor doesn’t really want your car. The creditor wants your money — the money that you owe to him or her.
How to Stop a Car Repossession
The creditor can repossess your car or can hire a repo man to do so. And once the repo man is hired, he’ll make every effort possible to get your vehicle, because that’s his payment.
At this point, you need to pay your bill ASAP or just go ahead and wait for your car to be taken. However, if you could pay your bill, then certainly you would have by this point.
Fortunately there’s another option that will allow you to stop the car repo and get rid of that debt. And that’s called Chapter 13 bankruptcy.
What Chapter 13 Bankruptcy Can Do For You
Chapter 13 bankruptcy is often referred to as a “debt reorganization plan.” When you file Chapter 13, you lump your debts — including your past-due car payment — into a repayment plan. And for 3-5 years, you make AFFORDABLE plan payments.
Then, once the payment plan is complete, the rest of the debt is forgiven, you’ve kept your car and it’s completely paid off.
This is a great option for those with income who want to keep their vehicle.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is also an option if you’re behind on your car payment, but not if you want to keep your car.
If you’re behind on your car payment and struggling with the debt, you can discharge it through Chapter 7 bankruptcy. But you’ll lose your vehicle in the process.
Also, if your car is repossessed, but you still owe a deficiency balance, then you can discharge that balance through Chapter 7 bankruptcy.
If you ARE current on your payment, you can file for Chapter 7 bankruptcy and most likely keep your vehicle.
Want a Free Bankruptcy Consultation?
If you’re behind on your car payment and want to talk to an experienced attorney about your options, then our FREE consultation is perfect for you.
Our attorneys are detailed, informative and genuinely care. We’ve been helping people get out of debt and onto a better life financially for decades. And we want to help you too. And our clients like us.
Call (901) 327-2100 today to schedule your appointment. Or you can contact us online.
Increase Your Credit Score Today
You may be worried about what bankruptcy or a car repo will do to your credit, and rightfully so. But a bankruptcy can actually create a great opportunity to re-establish and rebuild your credit score the right way.
At Darrell Castle & Associates, we offer 7 Steps to a 720 free to our clients. This online course will teach you how to rebuild your credit score to an A+ rating after a bankruptcy. Learn more here.