How can I use bankruptcy to recover my car after it has been repossessed?

When it comes to repossession, bankruptcy can help in some situations. Repossession occurs when a company takes back an asset from an asset based loan because of nonpayment of the property owner. This is quite common with vehicles. The key to recovering your vehicle is to file bankruptcy right after or prior to repossession. However, this is not a fool proof situation and it does not resolve the problem long term.

Factors to Consider

When it comes to getting back a reposed vehicle, it is almost always necessary to file bankruptcy quickly. That way, the automatic stay will go into effect before the lender terminates the loan. The automatic stay freezes all of the legal actions of your creditors. However, keep this in mind:

• You will be able to get back your vehicle in some cases.
• You are likely to still make restitution on the loan. The bankruptcy filing only stops the legal proceeding, but does not settle the loan you are behind on.
• If the bankruptcy trustee does not believe you can get caught up on the loan, he or she may not allow you to get back your vehicle.
• If you cannot get caught up on the loan, it may be best to allow the lender to repossess the vehicle.

Each situation is different. Because of this, it is best to speak to an attorney about your case before you actually file bankruptcy. In some situations, it may not be possible to get your vehicle back.