Recent reports from Fitch Ratings and the Federal Reserve of New York indicate that auto loan delinquencies are increasing. More borrowers are finding it difficult to keep up with their car payments, which raises the risk of repossession. If you’re in this situation, it might be time to explore your financial and debt relief options.
At Lerner and Rowe Law Group, our debt relief lawyer provides details on how an Arizona bankruptcy may offer a way for you to take control of your finances and keep your vehicle.
How Bankruptcy May Help Those Facing Auto Loan Delinquencies
If you’re behind on auto loan payments but want to retain your vehicle, filing for bankruptcy might help you avoid repossession and regain financial stability. Here’s how:
Before Repossession
Chapter 7 Bankruptcy: Through a Chapter 7 bankruptcy, you could redeem your car by paying its current market value, which is advantageous if your car is worth less than what you owe. Alternatively, you might reaffirm your loan with new terms that are more manageable for your budget so that your auto loan is no longer delinquent.
Chapter 13 Bankruptcy: A Chapter 13 bankruptcy allows you to create a repayment plan that could reduce the total amount you owe and/or lower your loan’s interest rate, making it easier to keep your vehicle.
After Repossession
If your car has already been repossessed, filing for Chapter 13 bankruptcy may be your best chance to recover it. However, following the 2021 Supreme Court ruling in City of Chicago v. Fulton, the process of retrieving a repossessed vehicle through bankruptcy has become more complicated, often requiring negotiations or litigation with the lender.
Having an experienced Arizona bankruptcy lawyer on your side can make all the difference in negotiating favorable terms with your lender.
How to Take Action Before It’s Too Late
Arizonans dealing with auto loan delinquencies need to act before their vehicle is repossessed. At Lerner and Rowe Law Group, our bankruptcy attorney can assist you in understanding your options and determining the best path forward. Call 602-667-7777 today to schedule a free, no-obligation consultation to discuss your bankruptcy options and how you may safeguard your vehicle from repossession.