For people who have fallen behind on motor vehicle payments, there is a significant chance that their vehicles might end up repossessed. No matter if it is voluntary or involuntary, repossession of a motor vehicle will damage your credit rating. If you find yourself in such a situation, it is a wise idea to obtain the assistance of an experienced bankruptcy attorney right away.
Advantages to Voluntary Repossession
There are some advantages to voluntary repossession because it provides you with a degree of control over the situation. If you choose this route, you must act before you begin to miss payments. If you experience financial difficulties and anticipate that you will be unable to meet your financial obligations, an experienced bankruptcy attorney can be particularly helpful.
After you begin to miss payments, you will become vulnerable. A creditor has the ability to repossess your vehicle, which often occurs in the middle of the night. Involuntary repossession is not only inconvenient, it is also often embarrassing.
Steps to Take if You Miss Vehicle Payments
The following are some important steps that you fall behind in your bill payments:
- Filing for Chapter 7 or Chapter 13 bankruptcy with the assistance of an experienced lawyer offers some distinct advantages if you are experiencing financial difficulty. A successful filing will result in an automatic stay being placed in your case, during which period creditors are unable to repossess your belonging unless it is authorized by a court.
- If you are experiencing financial difficulties that are not particularly serious, it may not be best to file for bankruptcy. Some people need just a small amount of time to reach financial stability again. In these cases, you should try to explain matters to a creditor in the hopes that they will offer to restructure your payment plan.
- In situations in which creditors are not willing to negotiate the terms of a loan or let you make a late payment, you might offer to let your vehicle be voluntarily repossessed. By making this offer, creditors might decide to settle your debt.
What to do if Your Vehicle is Repossessed
If you car is repossessed, there are several steps that you can take:
- Contact your lender to make sure that they are aware the repossession occurred
- Review your budget to determine if there is a way that you can afford car costs
- If possible, create a plan to pay your loan in full or to create a new payment plan
- Understand the rights that you have that protect you
- Take steps to increase your credit rating after losing your car
Speak with an Experienced Bankruptcy Attorney
You should not hesitate to speak with an experienced lawyer to determine if it is a better idea to file for bankruptcy or allow a voluntary repossession of a vehicle. Fortunately, an experienced lawyer can help you negotiate with creditors, which can often help to avoid bankruptcy as well as repossession. Do not wait until you fall behind on your payments to act. Instead, contact the Adam Law Group today to schedule a free case evaluation.