Ideal Bankruptcy Option When You Want to Avoid Repossession in North Carolina

 Posted on March 04, 2024 in Bankruptcy

If you are facing potential repossession of your vehicle in North Carolina, filing for bankruptcy may help you keep your car. Bankruptcy stops all collection efforts and gives you an opportunity to catch up on payments under the protection of the bankruptcy court. However, you need to choose the right type of bankruptcy filing to meet your needs. In North Carolina, Chapter 13 bankruptcy is usually the best option if your goal is to prevent repossession of your car. A North Carolina lawyer can help make sure this is the best option for your specific scenario.

What Chapter 13 Bankruptcy Does

Chapter 13 bankruptcy allows you to keep assets like your home or vehicle while you repay your debts under the protection of a court-approved repayment plan. This lasts three to five years. Under Chapter 13 you:

• Get an automatic stay against repossessions and foreclosures when your case is filed.
• Can cure arrears on secured debts like auto loans through your repayment plan.
• Keep possession of the vehicle while repaying the value of the vehicle over time.
• Have more flexible repayment options to catch up without interest or penalties.
• Avoid repossession of the vehicle as long as you stay current on payments.

Benefits Over Chapter 7

Chapter 7 bankruptcy fully eliminates many unsecured debts like medical bills or credit cards. However, secured debts like auto loans typically cannot be discharged. As soon as your Chapter 7 case closes, the auto lender can legally repossess the vehicle if you are still behind on payments.

Chapter 13 allows you time to catch up on missed payments while keeping the vehicle. As long as you make all payments in your repayment plan on time, the lender cannot repossess the vehicle during the bankruptcy. This gives you breathing room to get your finances back on track over several years.

Eligibility and Repayment Plan Factors

To file Chapter 13 in North Carolina, you must:

• Have regular income.
• Have unlimited secured debts or up to $419,275 of unsecured debts.
• File a repayment plan demonstrating you can afford plan payments.

The court reviews your income, assets, living expenses, and debts to determine an affordable repayment plan, usually three to five years. You must stay current on payments inside and outside the plan to avoid repossession.

Contact a Charlotte, NC Bankruptcy Lawyer

Chapter 13 stops repossession and foreclosure, so you have time to pay missed payments. To determine if it is the most ideal option for your situation, speak to a compassionate Mecklenburg County, NC bankruptcy attorney. This ensures you choose the right approach to stop any planned repossession while satisfying your debts. Call Blossom Law PLLC at 704-256-7766 to start with a free consultation.