Back in 2005, the United States made a series of significant changes to bankruptcy law. Car finance companies and mortgage companies were some of the lenders that were able to make changes to their repayment process. If you had an outstanding car loan, a lien on your car may be placed which strongly encourages you to catch up on your payments otherwise your car will be repossessed.
A lien is a conditional legal right to an asset or property. In the case of your vehicle, a lien can be placed on your car if you are behind on payments. If you take out a loan to finance a vehicle and then you default on the payments, you could have a lien on your vehicle that expires as soon as the loan is paid in full. Getting rid of a lien is nothing more than paperwork after you’ve paid your loan. If you aren’t able to make your payments and you know you’re going to default, it’s important to seek financial counseling immediately.
In some situations where you are facing outstanding loans on a vehicle, having a lien placed on your car can act as appropriate evidence of your filing for bankruptcy. The obligation to pay for vehicle payments might increase your debt to the point where you may qualify for Chapter 7 bankruptcy or a reduction in your disposable income so that you can make lower monthly payments under your Chapter 13 filing plan.
A professional bankruptcy lawyer will be able to work with you and your creditor. It’s likely that your creditors would rather work something out with you than repossess your vehicle at their expense. If you have a lien against your vehicle and you decided that it ‘s time for you to file for bankruptcy, it is wise to contact a legal professional immediately. Contact us for advice.
This post was written by Trey Wright, one of the best bankruptcy lawyers in Tallahassee! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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