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Did you know that repossession isn’t just for cars?
When most Colorado Springs residents hear the term repossession they think immediately of cars, but the truth is any big purchase that requires financing, such as, yes a car or truck, or also a boat, furniture, or major appliance like a refrigerator can be repossessed.
Chances are if you’ve financed a big item like one of the ones listed above, it was a necessity for your day-to-day life. So the thought of losing that financed item through repossession may fill you with dread. But life happens. Maybe you had a medical emergency or sudden unemployment, or it could be you simply mismanaged your budget. Whatever the reason, unexpected mounting debt can lead to missed payments on financed assets, which can lead to repossession.
If you have mounting debt and are worried your car, furniture or other financed purchase may be in danger of being repossessed, bankruptcy may be the best option. Our Colorado Springs bankruptcy attorneys have designed this website to provide general information on how to stop repossession through Chapter 7 or Chapter 13 bankruptcy. For more in-depth information, please contact our team of legal professionals for a free no-obligation case consultation.
If you’re reading this because your car has been repossessed in El Paso county, try not to panic. You have options. The first thing you should know is that you need to act quickly– you only have about 20 days to decide whether you’re going to try and get your car back because in Colorado a car finance company must only keep a car for 20 days after repossession.
The way we see it, you have 4 options available to you.
Rarely, once your car is repossessed, the lender can demand that you pay the entire loan off instead of just the missed payments before giving you the car back. What will most likely happen is that the lender will let you pay the arrears plus any repo charges incurred to get the car back. If you have not had multiple repossessions, you can usually just call the lender, arrange to pay the arrears and get your car back.
Obviously, if you’re already deep in debt, this is the least desirable option. But if you have the money, you can just pay the entire loan off, get the car’s title, and wipe your hands of the lender forever. However, our experienced Colorado Springs bankruptcy attorneys understand that not everyone has the luxury of having this much money on hand, especially on short notice. Chances are, if you’re here reading this, you’re in debt beyond just missing some car payments, so this option probably isn’t viable for you. But it’s worth including in this list, however unfeasible it may be.
Chapter 13 bankruptcy is the only way to force a lender to give back a repossessed car immediately without paying them any money. If the amount the lender demands to give back your car is too high, filing Chapter 13 bankruptcy forces them to give the car back and take payments over time.
There is an additional benefit of filing Chapter 13 bankruptcy in Colorado Springs– if you qualify. Some car loans can be “crammed down,” in Chapter 13. This involves paying off the car at a reduced or “crammed down” amount based on the value of the car through bankruptcy court. Be aware that this “cramdown” right only applies to cars purchased more than 900 days before filing for bankruptcy.
Sometimes it makes more sense to just let the car go. It’s worth noting that if you decide to take this option, you will often still be liable for a deficiency. If you have trouble paying a deficiency, you may be able to defeat it if the repossession process was faulty in some way or by discharging it (and other debts) in a Chapter 7 bankruptcy.
To discuss these 4 options in more depth and figure out which option is the most viable for your financial situation, please contact one of our Colorado Springs bankruptcy attorneys.
If your lender is threatening to repossess your vehicle or other financed property, filing for bankruptcy can help you protect your assets. But not all bankruptcies are the same. How you can protect your possessions from repossession will depend on what type of bankruptcy you are filing in Colorado Springs.
Individuals seeking debt relief in El Paso county commonly file for either Chapter 7 or Chapter 13 bankruptcy. Regardless of which you chose, as soon as you file for bankruptcy in Colorado an automatic stay goes into effect. The automatic stay halts all creditors or collection agencies from trying to collect money or assets from you during the duration of your bankruptcy case. This includes any creditor attempts to repossess your assets.
Chapter 7 bankruptcy, also known as simple bankruptcy or liquidation bankruptcy, is a form of bankruptcy in which the debtor’s debts are completely discharged via the liquidation of the debtor’s assets. All profits from the sale of the liquidated items are then used to pay off the petitioner’s debt. Any leftover debt not covered by the liquidation is then discharged.
Please don’t let the words “liquidated assets” scare you off from filing for Chapter 7 bankruptcy in Colorado Springs. If you’re looking to keep certain assets, such as your primary vehicle or tools you require to do your job, Colorado offers extremely generous asset exemptions for petitioners of Chapter 7 bankruptcy. That means that you may be able to keep your car from being repossessed when filing Chapter 7.
Chapter 13 bankruptcy is the other bankruptcy option for individuals seeking debt relief in El Paso County. As we explained in the previous section of this webpage, Chapter 13 bankruptcy is generally one of the “easiest” ways to get your car back if it’s been repossessed.
The chapter 13 bankruptcy plan, also known as a wage-earners bankruptcy, provides for payment or partial payment of secured and unsecured debts via a payment plan spread out over the course of 3 to 5 years. By filing your Chapter 13 case, your secured loan creditor will be forced to receive their payments through the Chapter 13 plan. This means that your past-due car payments will get lumped into your payment plan, allowing you to get caught up.
Our experienced El Paso county bankruptcy attorneys understand obstacles in life can sometimes cause a person to be late on car payments. Obligations such as credit card bills, medical bills, utility bills, and mortgage payments can be overwhelming. If you have fallen behind on your loan payments because of other financial obligations and are facing repossession by your lender, you do have options, such as filing for bankruptcy.
Bankruptcy can be an effective way to stop car repossession proceedings in El Paso County. You don’t have to navigate the repossession or bankruptcy processes alone. We’re here to help you stop your car from being repossessed—call our Colorado Springs debt relief attorneys today for a no-cost case evaluation.
With more than 50 years of collective experience handling bankruptcy cases in Colorado Spring, our CO bankruptcy lawyers understand that good people fall behind on bills every day through no fault of their own. We understand how stressful it can be dealing with aggressive phone calls from debt collection companies and we are ready to make them stop so that we can help you forge a path toward financial independence.
Don’t waste another minute. Contact us today and let us help you stop repossessions.