One of the benefits of filing Chapter 13 bankruptcy is that it can be a means of stopping a car loan lender from repossessing your vehicle. The Fort Lauderdale bankruptcy lawyers at Anidjar & Levine provide capable legal guidance to individuals who want to stop a lender from repossessing their vehicles through Chapter 13 bankruptcy. Our lawyers are well-versed in this area of bankruptcy law. We can go over your particular case and discuss with you whether Chapter 13 bankruptcy can help you reach your financial goals.How Chapter 13 Affects Vehicle Repossession in Florida
Chapter 13 generally allows you to keep whatever property you like as long as you can pay for it. If you have a loan on your car, the debt is considered a secured debt. This means that the car is collateral for the loan. If you cannot afford your car loan payments and default, the car loan lender can take the vehicle.
Chapter 13 bankruptcy provides protection against vehicle repossession. If you file for bankruptcy before your car is repossessed, the filing places an “automatic stay” on the repossession of your vehicle. An automatic stay is essentially a halt of any further collection activities. This means that the car loan lender cannot proceed with the repossession of your vehicle while your repayment plan is in the process of being approved.
If you want to keep your vehicle, your debt repayment plan must include a proposed method of handling the arrearage, or missed payments, on your loan. This prevents a lender from repossessing your car during and after the bankruptcy.
While your case is pending in bankruptcy court, you must make what are called “adequate protection” payments. These cover the depreciation on your vehicle while you await confirmation on your debt repayment plan. The payments are typically the same amount as your monthly payment. If you fail to make the payments, the car loan lender can ask the court to lift the stay.
A car depreciates quickly, so the loan on a car sometimes may be greater than the actual value of the vehicle. If this is the case with your car, you may be eligible for a cramdown. A cramdown in Chapter 13 bankruptcy allows you to reduce, or cram down, the loan on your car to its fair market value. A cramdown reduces your monthly car loan payments, and you may also be able to reduce the interest rate on your loan. To qualify for a cramdown, your loan must exceed the value of your car and you must have purchased the vehicle more than 910 days (two and a half years) before you file for Chapter 13.Diligent Bankruptcy Lawyers Serving the Hollywood Area
The Hollywood bankruptcy attorneys at Anidjar & Levine offer seasoned legal counseling in Chapter 13 bankruptcy matters. We understand the complex nature of bankruptcy cases, and we can provide you with the insight you need to make a wise decision for your particular financial situation. We can discuss the benefits of Chapter 13 with you, including how it can prevent vehicle repossession and whether it is appropriate in your specific case. We serve clients throughout Miami-Dade County, West Palm Beach, and South Florida. To schedule a free case evaluation, please give us a call at (800) 747-FREE or complete our contact form today.