If you’re worried about someone repossessing your car in Tennessee, filing for bankruptcy might help. When you file for bankruptcy, an automatic stay goes into effect. This stay is like a legal shield that stops most creditors from collecting debts, including repossessing your car. There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13.
Chapter 7 bankruptcy
In Chapter 7 bankruptcy, a bankruptcy trustee sells your non-exempt assets to pay down your debts. However, Tennessee has specific exemptions that might allow you to keep your car. If your car’s value is within the exemption limit, you can keep it if you continue making payments. If your car’s value exceeds the exemption limit, the trustee might sell it to pay creditors. But, if you’re current on your payments and the vehicle is necessary for your work or daily life, you might be able to negotiate with the trustee to keep it.
Chapter 13 bankruptcy
Chapter 13 bankruptcy is different. It involves creating a repayment plan to pay off your debts over three to five years. This type of bankruptcy can be beneficial if you’re behind on your car payments. Under Chapter 13, you can include your missed car payments in your repayment plan. This means you can catch up on your payments over time while keeping your car. Your vehicle won’t get repossessed if you stick to the repayment plan and make your current payments.
Tennessee has a right to cure
In Tennessee, you also have a “right to cure” period. This means that if you miss a payment, the lender must give you a chance to catch up before they can repossess your car. This period is usually between 10 to 20 day. If you can make the missed payments within this time, you can avoid repossession.
Will filing bankruptcy help after repossession
If a creditor already repossessed your vehicle, filing for bankruptcy may help. In some cases, you can get your car back if you file for Chapter 13 bankruptcy quickly enough. The automatic stay will stop the sale of the repossessed vehicle, and you can include the missed payments in your repayment plan.
The answer is: Yes!
In summary, bankruptcy can help prevent your car from being repossessed in Tennessee. Those who have questions about filing bankruptcy can contact an experienced bankruptcy lawyer in Tennessee to discuss options and strategies for holding onto cars and other assets, even when debt seems overwhelming.
