2021 is expected to see a huge increase in repossession of vehicles
because of loan defaults. These defaults are a result of missed monthly
payments because of financial hardships caused by COVID-19. A repossession of a
car is devastating, as it is typically an individual or family’s essential
transportation for getting to and from work and school. Without the car,
activities of daily living: going to work, going to school, going shopping,
etc., all become very difficult and in some cases impossible. BK
Lawyers Near Me Florida
Often a car repossession starts a snowball effect in people’s lives,
as the loss of personal transportation impacts their ability to earn a living
and in turn any reduction in income impacts other loans and debt payments. That
is why it is imperative that if you are behind on your car payments and your
car has not been repossessed or has recently reposed that you seek guidance
from an attorney who has experience in dealing with pre-repossession and
post-repossession situations. BK Lawyer Florida
In Florida Vehicles Can Be Repossessed Without Notice!
In Florida, repossessions fall under Florida statute 537.012, which
allows lender to have licensed possession agents take your vehicle without
notice to you once you have fallen sufficiently behind on your payments. Many
times, folks will wake up look out at their driveway and their car is no longer
there. They initially think it was stolen, but eventually find out it was
repossessed by the bank. At that point
their situation just became much harder, as the loss of personal transportation
impacts all aspects of their life and finances. BK
Attorney Florida
You Have Options If You Fall Behind On Your Car Loan.
It sounds hopeless, but it is not if you are proactive. First and
foremost, if you are falling behind on your car payments reach out to your
lender, most will work with you if you give them a chance. If you don’t reach
out to them, they will assume the worse and when they are able to do so under
the statute, they will initiate a repossession to protect their interests. If
your lender won’t work with you, you still have options. Chapter
13 Questions Florida
If you are in default on your auto loan in Florida, you are at risk
that your car will be repossessed at any time by your lender once they have met
all conditions under the statute. Don’t think that COVID-19 will prevent the
repossession of a vehicle forever, it won’t. Industry experts are expecting a
massive increase in vehicle repossessions as 2021 progresses. Be proactive,
before your car is taken or you fall any farther behind on your payments reach
out to an experienced attorney who has dealt with pre-repossession and
post-repossession situations. They will be able to help you figure out your
best options. Chapter
7 Requirements Florida
Bankruptcy Can Be A Great Option To Avoid Or Deal With A Repossessed
Car.
For many individuals who have defaulted on their auto loans,
bankruptcy offers a great option to halt a car repossession, as the automatic
stay provided once a bankruptcy case is filed requires your auto loan lender to
cease all collections activities against you, including repossession
activities. Once a bankruptcy case is filed, your auto loan lender cannot call
you, cannot file a lawsuit against you, cannot continue to pursue an existing
lawsuit against you, or continue attempts to repo your car. They are required
to deal with you through your bankruptcy estate and can only take actions that
the bankruptcy court allows them to take. Bankruptcy provides a complete stop
and an opportunity to keep your car in the right circumstances. Chapter
13 Bankruptcy Attorney Florida
If you are facing a vehicle repossession, timing is everything. If you
are behind or expect to fall behind on your vehicle loan, you should speak with
a bankruptcy attorney before your vehicle is repossessed or you fall further
behind on your payments. It is important to remember that typically the
bankruptcy stay will only prevent your lender from taking the vehicle back, but
it usually cannot be used to force them to return the vehicle to you if they
have it in their possession before you file your bankruptcy.
Chapter 13 Bankruptcy Can Stop A Repossession Under The Right
Circumstances
I have only had one case in the last 20 years where I was able to
convince the lender to return the vehicle to a client and allow them to catch
up and pay off the remainder of their auto loan in a Chapter 13 Bankruptcy. In
that case, we were able to get a Chapter 13 Bankruptcy Plan confirmed that
allowed for all the past due payments to be paid over a five-year period and we
were able to Cram Down the value of the vehicle to it’s actual market value,
not what was still owed on the loan and were able to reduce the interest being
paid so that on the monthly payments going forward my client could afford to
keep their car and in the process eliminate the remainder of their other debts
as well.
A Chapter 7 Bankruptcy Can Stop A Repossession Under The Right
Circumstances
In other situations, folks who wanted to keep their cars, but could
not qualify for a Chapter 13 Bankruptcy were able to use Redemption as a way of
keeping their car in a Chapter 7 Bankruptcy case. Under Section 11 U.S.C. 722
of the bankruptcy code, there is a way to keep your car by redeeming it, which
is a fancy way of saying get a new loan on it for the value of vehicle as it
currently is, not what is outstanding on the existing loan. The key to this
process working for you is qualifying under the bankruptcy code to file for a
Chapter 7 Bankruptcy and qualifying with 722 Lenders to get the new car loan to
redeem your vehicle through your bankruptcy. If you cannot qualify with the 722
Lenders you will not be able to keep your vehicle.
What If You Don’t Want To Keep The Vehicle?
In some cases, you may not want to keep your vehicle and you decided
to walk away from your vehicle and let the chips fall where they may, which is
a really bad idea. Doing so will result in the vehicle being sold at auction
for much less than it is actually worth, and a deficiency balance being
attributed to you for the balance of the auto loan that was not paid after the
vehicle was auctioned off. The lenders will either go after you directly for
this deficiency or they will sell the rights to this deficiency to companies
such as Autovest, who make all their profits from going after delinquent auto
loan debts. If they cannot convince you to pay the delinquency willingly, they
will sue you for the delinquency in court. If you ignore the lawsuit, they will
get what is called a Default Judgment against you and it means they basically
win their case without having to prove a thing. If the default Judgment stands
and a Final Judgment is entered, they then have the ability to use the courts
to recover the monies owed by placing liens on property, garnishing non-exempt
property, bank accounts or wages.
Don’t let it come to this, before your vehicle is repossessed, or a
Default Judgment or Final Judgment is entered against you speak with an
attorney who can help you determine what options you have available to deal
with this situation on your terms.
Are You Dealing With A Car Repo Now?
If you are, it is important that you speak with a bankruptcy attorney
who can help you evaluate your potential options and issues that may impact
your vehicle both inside and outside of a bankruptcy. Every bankruptcy case is
different, so what has worked for one debtor may not necessarily work for
another. If you are in Miami-Dade County or Broward County, Florida, please
feel free to contact us to set up a FREE consultation to discuss your specific
situation. It is important to be proactive if you are behind on your payments
or about to become behind on your payments. Seek legal advice and make the best
decisions you can for your specific situation.
Disclaimer
This blog post is made available for educational and informational
purposes only and to promote a general understanding of the law, and not to
provide specific legal advice. Use of this blog does not create an
attorney-client relationship. Reading this post is not a substitute for
obtaining legal advice based on the unique facts of your situation from an
attorney licensed to practice law in your state. No representation is made
regarding the current state of the information contained in this post. Examples
that may be provided in this post are merely for illustrative purposes; the
results in your case may be different and no results are guaranteed.
No comments:
Post a Comment