The most common secured debt is vehicle loans, new or used; a car usually costs more than most people have saved up. It can be convenient to make payments and have access to a vehicle. We often need a way to get to school, work, shopping for food or medicine. Not every area has public transportation available.
The downside of financing a vehicle is that if you miss a few payments, it is relatively quick and easy for the lender to repossess it. Each state has guidelines regarding when and how a vehicle may be repossessed. When purchasing a car, the consumer signs a clause in the contract giving the lender the right to take back the vehicle if the buyer stops making payments. If you don’t maintain adequate insurance on the vehicle, your lender can also take back the vehicle. By taking advantage of the automatic stay in bankruptcy, you can stop the repossession and give yourself time to make financial arrangements.
Lenders Often Lose Money By Taking Back the Car
Most lenders would prefer you to keep up with your payments. They have the right to repossess a vehicle after the first missed payment although they usually don’t. Your vehicle starts losing value as soon as you drive it off the car lot. This is also one of the reasons your lender is reluctant to repossess your car. They lose money on the cost of the repossession plus the value of the car.
Redeem the Vehicle
Most lenders will let you ‘redeem’ or buy back the car by paying the amount you owe plus any fees incurred by the repossession. If you need more time to get the money together and keep your car, you may want to file bankruptcy. The automatic stay will hold off any actions taken against you regarding your debt.
Contact a Fort Worth bankruptcy attorney today to find out how you can get financial relief.