eightthirty
07-11-2006, 12:21 PM
State laws differ but generally, if you are behind on car payments, the creditor may take possession of your car without notice. Unless the contract gives a grace period, the car can be repossessed if you are only a day late. You are not required to give the car to the creditor, but they may take it from the street or a parking lot. Concealment of the vehicle with intent to hinder the creditor may be a criminal offense. [See ARS § 13-2204 (http://www.doney.net/code/ars13-2204.htm) for example] If the car is repossessed, the creditor may sell the car at an auction, and you may still have to pay the balance remaining on the loan after sale of the vehicle, plus the creditor's collection expenses. Chapter 13 can stop repossessions. If a car or other vehicle has been repossessed but not sold by the creditor when the case is filed, the court may order the creditor to return it to you. Under Chapter 13, interest charges may be reduced, and your monthly payments can often be lowered. In certain cases, the balance secured by the vehicle may be reduced to its market value, even if this is much less than the loan balance. [11 USC §1325(a)(5) (http://www.doney.net/bkcode/11usc1325.htm#1325%28a%29%285%29) & unnumbered last subparagraph] In Chapter 13, you pay for the car in a single monthly payment which consolidates all of your bills. Often this one payment can be lower than your old car payment alone.
A caution if you have filed a prior bankruptcy in the past year. It is the automatic stay which stops or prevents creditors collection actions. The stay will end on the 30th day after the filing of the present case if you filed one previous bankruptcy case which was pending within past year. The stay will not go into effect at all if you filed two or more previous bankruptcy cases which were pending within the past year. To have the stay take effect longer where there was a single previous case, or at all where there was more than one previous case, you must file a motion with the court and demonstrate "that the filing of the later case is in good faith as to the creditors to be stayed." Prior cases which were dismissed under 11 USC §707(b) (http://www.doney.net/bkcode/11usc0707.htm#707%28b%29) for abuse of the code and failure to meet the means test are excluded in determining how long or whether the stay will take effect. [11 USC §362(c)(3) (http://www.doney.net/bkcode/11usc0362.htm#362%28c%29%283%29) and 11 USC §362(c)(4) (http://www.doney.net/bkcode/11usc0362.htm#362%28c%29%284%29)]
SOURCE (http://www.doney.net/)
A caution if you have filed a prior bankruptcy in the past year. It is the automatic stay which stops or prevents creditors collection actions. The stay will end on the 30th day after the filing of the present case if you filed one previous bankruptcy case which was pending within past year. The stay will not go into effect at all if you filed two or more previous bankruptcy cases which were pending within the past year. To have the stay take effect longer where there was a single previous case, or at all where there was more than one previous case, you must file a motion with the court and demonstrate "that the filing of the later case is in good faith as to the creditors to be stayed." Prior cases which were dismissed under 11 USC §707(b) (http://www.doney.net/bkcode/11usc0707.htm#707%28b%29) for abuse of the code and failure to meet the means test are excluded in determining how long or whether the stay will take effect. [11 USC §362(c)(3) (http://www.doney.net/bkcode/11usc0362.htm#362%28c%29%283%29) and 11 USC §362(c)(4) (http://www.doney.net/bkcode/11usc0362.htm#362%28c%29%284%29)]
SOURCE (http://www.doney.net/)