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People consider filing for bankruptcy for a variety of reasons. Some do it to liquidate their business, while others just want the collection calls to stop. One of the top reasons for pursuing bankruptcy is the ability to halt a repossession of your vehicle.
If preventing repossession during bankruptcy in Flint is your goal, you’ll benefit from discussing your options with legal counsel. Our experienced bankruptcy attorneys can help you understand how bankruptcy could delay or even prevent having your car repossessed.
Car repossession usually starts after you fall behind on your loan payments. In Michigan, your lender has the right to repossess the vehicle once you default, and they often do not need advance notice before taking it. That means the process can move quickly, sometimes before you have a chance to catch up.
As long as the lender does not breach the peace, they can take the car without going to court first. After repossession, the lender may sell the vehicle and pursue you for any remaining balance. This is possible because Michigan is known as a “self-help” state.
If you rely on your car to get to work or handle daily responsibilities, losing it can create immediate problems. The good news is that there are ways you can legally avoid repossession while working on your financial issues. Our attorneys can answer your questions about preventing car repossession in Flint via bankruptcy.
When you file for bankruptcy, an automatic stay goes into effect immediately. This court order stops most collection activity, including vehicle repossession. If your lender has not yet taken the car, the stay can prevent them from moving forward.
Once the stay is in place, the lender cannot legally repossess your vehicle, send collection notices, or continue enforcement actions without court permission. If they ignore the stay, they risk penalties. This protection gives you time to assess your options and decide how to handle the loan.
If your car has already been repossessed but not yet sold, the automatic stay may still help. In some cases, you can request that the lender return the vehicle, especially if you act quickly and propose a way to address the missed payments.
However, the stay is not permanent. The lender can file a motion asking the court to lift the stay if you are not making payments or if the vehicle is losing value. If the court grants that request, repossession can move forward again.
Stopping repossession is a temporary fix to an ongoing problem. The good news is that in addition to preventing repossession, filing bankruptcy in Flint can also put you on a path to keep your vehicle. This is done through something known as reaffirming the debt.
Reaffirming your car loan means you agree to keep the debt and continue making payments after your bankruptcy case ends. This option is common in Chapter 7 if you want to keep your vehicle and stay current on the loan.
When you reaffirm, you sign a new agreement with the lender that removes that debt from your bankruptcy discharge. In practical terms, you are telling the court that you will remain personally responsible for the loan. If you later fall behind, the lender can repossess the car and pursue you for any remaining balance.
The prospect of having your car taken back by creditors can be overwhelming, especially if you rely on it to get to work. The good news is that preventing repossession during bankruptcy in Flint is possible. Call today to learn more.
We have locations available by appointment in the following areas. Please call us to speak to an attorney and set up an initial meeting.
We are a debt relief agency helping people file bankruptcy under the United States Bankruptcy Code.
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