The Credit Union Journal's May 2019 issue contains a recent article titled ""Are Credit Unions Ignoring Their Roots by Avoiding Subprime Auto Loans?"" As it turns out, automobile loan default rates are once again at all-time highs. This is a nationwide issue for lenders, not just one affecting Ventura or Los Angeles counties.
There are legal options available to stop the repossession of your vehicle. Many consumers are unaware that under both Chapter 7 and Chapter 13 of the Bankruptcy Code, you can temporarily stop your lender from repossessing your vehicle. During bankruptcy proceedings, the court issues a ""Automatic Stay"" that prohibits the lender from repossessing your vehicle. The lender can ask the court to lift the ""automatic stay,"" and if the court agrees, the lender may take possession of the vehicle regardless. However, this temporary stay may be all you need to get the lender's attention in order to negotiate a modified repayment plan with you and your attorney.
The best way to handle this situation is to communicate with your auto lender, and the most effective way to do so is through a bankruptcy attorney, as it carries more weight. It also prevents the lender from bullying you. Your attorney can renegotiate the terms and assist you in establishing a new payment plan, allowing you to keep your vehicle during a bankruptcy.
Consider, if you will, that lenders are not in the automotive business, they are in the lending business, and they simply want to be paid according to the original agreement. If they realize that won't happen, they will evaluate their options and determine what is best for them. Perhaps a reduced interest rate, reduced balance, or renegotiated terms are preferable to a repossessed vehicle with a low resale value due to wear and tear and depreciation for the lender. Lenders do not want to lose any more money than is strictly necessary.
Remember that the 'automatic bankruptcy stay' is only temporary, and if you have not been making timely payments, you can expect the lender to demand the return of the vehicle or repossess it once your case has been resolved. Keep in mind that the stay is only in effect for the duration of the Chapter 7 bankruptcy proceedings, which lasts approximately three months.
How Can I Prevent Repossession of My Car During Bankruptcy Court Proceedings?
Pay the charges
Make up overdue payments
Create a repayment plan and ask the court to approve it.
Communicate with the lender via your attorney.
Request assistance, perhaps paying interest for only a few payments.
Restructure the Car Loan
Ask the court if you can buy back your vehicle at its current market value (Redeeming Your Car under Chapter 7 Bankruptcy Law).
Inquire with your Chapter 13 bankruptcy attorney about ""cramdown"" strategies.
What Options Do You Have If Your Vehicle Is Repossessed Prior to Your Bankruptcy Filing Date?
Request the assistance of your bankruptcy attorney in devising a repayment plan to ensure the lender receives the missed payments. If this has already occurred and your vehicle has been repossessed, act immediately. Contact a bankruptcy attorney immediately! Probably the best piece of advice ever.
Summing everything up!
You must know your rights and comprehend your lender's motivations. You need a competent bankruptcy attorney who will work for you and who has dealt with local lenders in Ventura and Los Angeles County. A lawyer with decades of knowledge and experience. With the proper strategy, you will be able to keep your car, avoid humiliation, and avoid losing your means of transportation. Considering that we reside in California, you need a vehicle."""