Stop Repossession  With Bankruptcy 

Facing repossession? Learn how the Law Offices of Wenarsky and Goldstein, LLC can help you stop repossession and protect your assets with the bankruptcy process

Can Bankruptcy Help Stop Repossession?

When you take a car loan or any other type of loan to help you purchase property, you might feel like the property is completely yours since you can use it without restrictions. Unfortunately, that is not the case.

 Until you pay off the loan, the lender (the bank or financial institution that loaned you the money) has rights over the property. You can keep using the property as long as your loan payments are up to date. If you miss even one payment, the lender could repossess the property (without a prior repossession notice ) and sell it off to recover the loan’s costs. 

Generally, you can stop repossession if you pay up what you owe. Even after the property has been seized, you’ll still have the right to redeem it by paying off the outstanding balance and any related expenses before the lender sells it off. However, if you’re facing financial difficulties, paying off the loan to stop repossession might be impossible. You need a solution that can address your financial situation and stop repossession at the same time so you don’t lose your property.

Bankruptcy stands as a beacon of hope for those drowning in overwhelming debt. This legal procedure might be the lifeline you need to stop repossession and overcome your financial challenges. But it’s a multifaceted tool that requires careful consideration and professional assistance.

Our experienced bankruptcy attorneys at the Law Offices of Wenarsky and Goldstein, LLC can guide you as you explore the bankruptcy process and its unique pathways out of financial distress and toward stability. Below, we explain how bankruptcy stops repossession and why it might be a viable option for you in these circumstances. To learn more, read on.

What Is Bankruptcy?

Bankruptcy is a legal process designed to help individuals or businesses eliminate or repay their debts under the supervision of the bankruptcy court. 

Filing a bankruptcy petition offers those with overwhelming debts the opportunity to obtain debt relief and a fresh start to rebuild their finances. It might be just what you need to overcome your financial challenges in this difficult time.

There are two types of bankruptcy for individuals under the Bankruptcy Code:

Chapter 7 Bankruptcy

Also called liquidation (bankruptcy), Chapter 7 involves the sale of a debtor’s property by the bankruptcy trustee. The proceeds from the sale are distributed to the creditors. Any unsecured debts left after the proceeds are discharged ( subject to a few exceptions), and the debtor would no longer have to pay them.

Chapter 7 bankruptcy, by its nature, can lead to the loss of some assets. However, because the process eliminates most unsecured debts, it can help free up funds that could be used to reclaim repossessed property or settle settlements to prevent repossession.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows individuals with regular incomes to reorganize their debts and repay them over a 3 to 5-year period through a court-approved repayment plan.

Both types of bankruptcy offer immense benefits. However, they have different implications, particularly if you wish to preserve your assets. Before deciding on either, it would be wise to contact a personal bankruptcy attorney who can help you understand the pros, cons, and legal requirements for each to ensure you choose the one that best suits your circumstances.

How Does Bankruptcy Stop the Repossession Process?

Filing a bankruptcy petition automatically stays or stops creditors from collection actions. This means that creditors must cease activities like repossession, foreclosure, wage garnishment, or any other act geared toward debt recovery.

However, the automatic stay is only a temporary shield in relation to secured debts such as mortgages. In such cases, the lender can ask the court to lift the stay to enable them to repossess the property. But even if that eventually happens, the automatic stay would have bought you some extra time to strategize and possibly devise a solution that could help you avoid repossession.

Chapter 13 bankruptcy, by its nature, can also protect you from repossession if you qualify. This type of bankruptcy allows you to catch up on late payments and helps you secure any assets that were at risk of repossession.

However, while paying off the loan arrears under your Chapter 13 repayment plan, you must keep up with current payments until the loan is paid off. Otherwise, you could fall into default, which could again activate the lender’s fight of repossession.

Can Loan Modification or Debt Restructuring Help to Stop Repossession?

Debt restructuring and loan modification are debt management mechanisms that involve negotiating with creditors to change the terms of your loan agreement to make the debt more manageable and easier to repay.

In an ideal world, modifying the terms of your loan contract or restructuring the debt could bring you the relief you seek.

However, both strategies require the lender’s agreement, and it is difficult to find a lender who would be open to such changes when they can easily repossess your property.

If you seek a loan modification, it would be more effective to go through the Chapter 13 bankruptcy process, particularly since you’re not solely at the mercy of the creditor. As long as your repayment plan meets the legal requirements, the court will likely approve it, and you can catch up with past due payments, pay off the loan balance without stress, and keep your property in the process.

Moreover, in the rare event that it works, loan modification/restructuring only targets the specific loan for which the arrangement is reached. If you have multiple loans to deal with or are facing overall financial hardship, you need a comprehensive solution that addresses your entire financial situation and not just a part of it.

How the Law Offices of Wenarsky and Goldstein, LLC Can Help

When you have immense debts to the point where your property is in danger of repossession, bankruptcy can help lighten your financial burden, secure your assets, and set you on the path to financial freedom.

At the Law Offices of Wenarsky and Goldstein LLC, we are committed to helping individuals emerge from financial distress with tailored bankruptcy solutions. With our extensive experience, we can help you navigate the complex bankruptcy process, take decisive steps to stop the repossession of your assets and fix your financial situation.

In these difficult times, our personal and business bankruptcy lawyers  can help you clarify your options, provide sound legal advice to help you make informed decisions, and represent you throughout bankruptcy court proceedings. 

We want to see you succeed, and we will be glad to use our wealth of knowledge and legal experience to steer you toward financial relief.

Let Us Help You Stop Repossession

The threat of repossession demands swift and decisive action. Immediate intervention can halt the advance of this daunting process, affording you the precious time needed to reevaluate your financial position and find lasting solutions.

Our team at the Law Offices of Wenarsky and Goldstein, LLC can help you navigate bankruptcy as an effective solution to looming property repossession and unmanageable debts.

We don’t just start the process; we support you at every twist and turn, ensuring that your rights and assets remain shielded to the maximum extent possible based on your unique circumstances.

Contact us today and let our firm help you lay the groundwork for a more secure financial future.

Call the Law Office of Wenarsky & Goldstein

At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.