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How to manage a repossessed car with a bankruptcy

On Behalf of | Nov 23, 2021 | Chapter 13 Bankruptcy |

Filing for bankruptcy in Tennessee can help you protect your assets or get back others that you’ve lost. If you need time to organize money to pay back your car loan, a bankruptcy might help, but it depends on the situation.

Wait for terms of redemption

Anytime a lien holder repossesses a car, they’re required to correspond with you. In fact, repossessions are rarely a surprise, for the lien holder will attempt to notify you of back payments. Once your vehicle is taken, you’ll shortly receive a notice for your lien holder’s terms of redemption. These are terms in which you can regain your car without filing for bankruptcy.

Consider a loan reinstatement

To reinstate a car loan, you need to amend any backlog with your lender. The cost they incurred to repossess your vehicle is also covered by you. Getting your payments back to their current, expected status is key. Without filing for bankruptcy, they might reinstate your loan once you show commitment on your part. Just realize that one error in future payments could cost you big.

Start a bankruptcy filing

Chapter 13 bankruptcy is an option if you find yourself late on other bills. With this clause, a court organizes payment options that allow you to keep your things. If your car has already been repossessed, filing for bankruptcy might be a way to get that car back. Your lender might still have the right to deny your loan, however, and you must catch up on payments in a timely manner.

Bankruptcies in Tennessee

Bankruptcy is an option to regain your vehicle after it’s been repossessed. However, you need to determine if that’s the right course of action or if a less drastic measure would allow you to regain your car.