Cars are expensive to run. If you are struggling to pay your debts, keeping your vehicle fuelled and keeping up with its payments may be challenging. Yet, as well as being something that consumes your money, your car may help you earn it.
You might use your vehicle to get to work. Or, if you are self-employed, it may be the way you get to clients’ houses. No car could mean no income. Yet, if you do not keep up with the monthly car loan installments, you might lose it.
Lenders can repossess your car without warning you
If you check the vehicle loan agreement carefully, you will see under which conditions the lender may take the vehicle off you — failing to make even one payment might be sufficient grounds. State laws might not require them to warn you either. They can just turn up and take it away because you have broken the agreement which allowed you to have it in the first place.
Filing for bankruptcy limits a lender’s ability to repossess your vehicle. Once you file, lenders are put on hold. They cannot harass you or do things such as repossess your car. By filing before you default, you give yourself more options.
A Chapter 13 bankruptcy lets you renegotiate payment schedules. A Chapter 7 filing allows you to explain why you need to keep certain things, such as your car. If you rely on it to earn money, a court should hopefully see sense in letting you retain it.
Having help to review your options and present your situation to a bankruptcy court will be essential to getting an outcome that allows you the best chance of moving forward.