Vehicle repossessions occur when the lien holder attempts to take back the vehicle or collateral due to missed payments. You may also choose to voluntarily turn in your vehicle if you can no longer maintain the payments. This is referred to as a “Voluntary Repossession.”
There are options to stop this process or repair your credit score. You can:
- Legally stop the repossession before it occurs.
- Get the vehicle back before the auction sale if it has already been taken.
- Modify the repayment terms to lower your vehicle payment and potentially reduce what you owe.
- Return the vehicle back to the lender if you can no longer afford payments. Eliminate deficiency and other debt so that you can restore your credit in order to qualify for a future vehicle purchase.
Get resolution to prevent unexpectedly losing your transportation, which can quickly have a negative impact on your life. We have solutions and even offer same day protection.
Reduce Vehicle Payments
If you wish to maintain ownership on a vehicle loan but are behind on payments, our attorneys can set up repayment terms. Through the Chapter 13 program, our lawyers can stop the car repossession before it happens or get the vehicle back if it has already been repossessed – as long as it has not been sold at auction.
We can also alter your vehicle payments to better work within your budget. Our attorneys can lower your vehicle loan repayment terms through the filing of a Chapter 13 Reorganization. This program will:
- Modify your vehicle loan and spread the missed payments over the course of the program (36 – 60 months)
- Reduce loan to a reasonable interest rate
- Extend the terms of the loan to lower the monthly payment
If you have owned the vehicle for more than 2.5 years, we can actually alter the value of the vehicle for the duration of your loan contract. This will lower the vehicle’s value (aka “Cramdown”) to current market value versus the balance owed on the contract your monthly payment will be lowered and the program will provide you with more favorable payment terms.
In addition to providing resolution to your vehicle situation, the Chapter 13 program offers other unique benefits and help for your finances. Filing a Chapter 13 plan will:
- Create a customized debt consolidation based on your individual circumstances: debt, income and monthly bills.
- Prioritize your budget to create a payment hierarchy.
- The program’s first concern is maintaining payments on secured loans and scheduling repayment on secured loan arrearages (such as missed mortgage or vehicle payments) with reasonable terms; 0% interest for repayment on arrearages.
- The program’s second priority is your maintaining money in your budget to cover your monthly living expenses.
- Lastly, whatever money is left over in the monthly budget goes towards your unsecured creditors:
- Credit cards
- Medical bills
- Personal loans
- Loan deficiency debt
- Old utility bills
- You are only required to pay your “best efforts” toward these unsecured creditors. The balance of the debt is legally eliminated or discharged at the completion of the 36 – 60 month program.
- Eliminate a second mortgage or home equity loan to re-balance your home’s value to current market conditions and/or reduce principal mortgage debt owed on a rental property(s)
- Benefit from court protection from your creditors including home foreclosure, judgments, garnishments and all creditor calls.
- Improve your credit over the course of the program by eliminating debt to enhance your debt-to-income ratio and restore timely payments to your creditors. These two factors influence 65% of your credit score according to FICO.
Eliminate or Reduce a Loan Deficiency Resulting from Vehicle Sale
If you simply cannot afford your car and wish to “voluntarily surrender” it back to the creditor or if the vehicle has been repossessed and already sold at auction, we can help eliminate or reduce the resulting deficiency through a Chapter 7 or Chapter 13 bankruptcy. When the lender sells the car at auction, the balance on the contract or “loan deficiency” becomes unsecured debt and can be eliminated through the Chapter 7 Fresh Start or likely reduced through the filing of a Chapter 13 Reorganization.
Chapter 7 is a straight debt elimination program designed to provide total debt relief and a fresh financial start. Filing for Chapter 7 will:
- Provide a full court discharge of unsecured debts such as credit cards, medical bills, loan deficiency debt, personal loans, old utility bills, etc.
- Court protection from creditor calls, collections, judgments and garnishments.
- Opportunity to re-build your credit by wiping the credit slate clean for a fresh start.
Proactively dealing with your vehicle situation and other debts will reduce the stress of budget uncertainly. It will also allow you to more quickly restore your credit that has been negatively impacted by missed car payments and perhaps an unbalanced budget.
We offer free in-office or phone consultations to review your personal circumstances, analyze your situation and advise you on the best course of action. We specialize in bankruptcy law, debt resolution, foreclosure prevention and credit repair. We have offices in Detroit, Southfield, Dearborn, Flint, Ann Arbor and Warren, Michigan. Please call us toll free at 866-261-8282 or click here to schedule a consultation right now.