Catch-22 situations can present themselves when financial difficulties arise. One of them is the matter of transportation to and from work. Let’s say that you fall behind on your car payment because you are having monetary problems, and your vehicle is repossessed. Without a car, you may find it hard to get to work on time or complete a successful job search if you are unemployed. You lost the vehicle due to a lack of resources, but it will be even more difficult to satisfy your creditors without transportation. If you find yourself in this position, a Chapter 7 bankruptcy filing can provide a solution.
As soon as you file for Chapter 7 bankruptcy, you get an automatic stay. This means that your creditors cannot try to collect debts for a prescribed period of time while the bankruptcy process is underway, so your car can not be repossessed. However, the lender who holds the note on the vehicle can file a motion to get permission from the judge to repossess.
If you were behind on the payments when you filed the bankruptcy, you can potentially make arrangements with the lender to bring the payments current. After this is done, you will be able to retain possession of the car after the bankruptcy was finalized. Redeeming a vehicle is another interesting possibility. When you file a Chapter 7, you may be able to redeem the car by paying the lender the fair market value, even if it is far less than the amount that you owe on the car.
Chapter 7 Bankruptcy Can Free Up Resources
You may find it hard to pay your car payment because you have unmanageable credit card debts or medical bills. If you can get out from under these unsecured debts, you will have the money you need to make your car payments on time. If you were to file a Chapter 7 bankruptcy, the unsecured debt will be discharged. However, as long as you are current on your car payment, you will be allowed to keep the car (unless you had a great deal of equity in the vehicle).
We have offices in numerous different cities in Oregon and Washington, including Eugene, Portland, Medford, and Salem. If you will like to discuss a potential Chapter 7 bankruptcy filing with one of our attorneys, we will be more than glad to assist you. You can set up a free consultation right now if you call us toll-free at 1-800-682-9568.