Preventing Repossession During Bankruptcy in Detroit

A person might be reluctant to file a bankruptcy petition due to fear of having a bank or a lender repossess their assets. The reality is that a bankruptcy filing prevents immediate asset seizures and, in many cases, enables petitioners to retain possession of their assets.

The bankruptcy attorneys at the Fairmax Law Debt Relief Law Firm have in-depth knowledge and experience in preventing repossession during bankruptcy in Detroit. We also offer a no-money down fee payment structure that further eases the Chapter 7 or Chapter 13 bankruptcy petition process.

How Can a Bankruptcy Petition Stop Repossession Efforts?

Chapter 7 bankruptcies work by liquidating certain assets to pay off creditors and eliminate debt quickly. Chapter 13 bankruptcies restructure and consolidate debts for repayment over three to five years. Both processes are specific to individual petitioners and not corporations. An experienced Detroit attorney can manage both processes in ways that help a petitioner avoid having a lender repossess critical assets, such as a house or vehicle, during the bankruptcy proceedings.

A bankruptcy petition delivers this relief by:

• Automatically and immediately stopping repossession once you file a Chapter 7 or 13 bankruptcy petition
• For Chapter 7 petitions, accommodating homestead exemptions that allow you to retain possession of your house under certain conditions, including your agreement to continue making payments
• Also for Chapter 7 petitions, allowing you to keep your car if you reaffirm your debt and make regular payments or, in some cases, enabling you to make a single payment equal to the car’s current market value, even if that value is below the total outstanding car loan balance
• For Chapter 13 petitions, transferring your loan into a debt repayment plan that may be at a reduced interest rate, with continued payments over a three- to five-year term, or, if you bought the car more than two and a half years before you filed your bankruptcy petition, potentially reducing the balance to the current market value

Keep in mind that lenders will not automatically offer any of these options, and they may only be available if you have help from a knowledgeable bankruptcy lawyer who could negotiate with lenders on your behalf.

Are There Limitations on Stopping Repossession During Bankruptcy?

Bankruptcy proceedings are supposed to give overextended borrowers a fresh start, but they are not available to borrowers who file multiple bankruptcies over a brief period of time. A lawyer from our Detroit firm could determine if you are able to rely on bankruptcy processes to prevent repossession and whether a court or bankruptcy trustee will reject your efforts.

In addition, a lender has the right and option to ask a bankruptcy court to lift the automatic stay that stops repossession efforts. A lender might file a motion to lift the stay, for example, if a petitioner does not make payments that the court has ordered or the petitioner has otherwise abused the process.

Contact Fairmax Law in Detroit for Help To Avoid Bankruptcy Repossession

A lender’s repossession efforts frequently target the things you need to get out of debt, such as the car you need for your job and your family’s dwelling. Preventing repossession during bankruptcy in Detroit is a crucial part of the path to financial recovery, and our attorneys at the Fairmax Law Debt Relief Law Firm are ready and able to represent you in that process. Please contact our local office or any of our other locations to schedule a private consultation with a bankruptcy lawyer today, and click here to fill out our online debt calculator.